While homeownership is certainly part of the American Dream, this may just not be possible for you right now. For many of us, this leaves renting, especially if your credit score isn’t high enough to qualify for a mortgage.
There’s a major catch to this, though, which you may already have run across while hunting for a new place to stay: landlords are often very hesitant to rent an apartment to individuals with low credit scores. Since there are probably thousands of people eager to start renting an apartment in your area, you’ll be up against some stiff competition. So, there are some questions you need to ask yourself even before looking for a new apartment: is there some minimum credit score the typical landlord requires from new tenants? Does your credit history affect which buildings will let you in? And, perhaps, most importantly:
How Does a Landlord See Your Credit Score?
Landlords, somewhat deservedly, have a bad reputation for being unreasonable, greedy, and sometimes borderline criminal. There are definitely two sides to this coin, though: some people think of renting an apartment as a license to do pretty much anything they want to it, sometimes leaving the property in ruins and the landlord in tears. Often, the security deposit doesn’t even come close to covering the damage. Eviction is time-consuming and expensive, even in cases where the tenant is clearly at fault.
An apartment owner or landlord sees their property as an investment and has maintenance expenses and probably a mortgage to service. This means that a tenant who doesn’t pay costs them money. They’re therefore happy to spend around $30 for a credit report from one of the main credit bureaus or even a more thorough background check. They may even require prospective tenants to pay this fee. They do have to get your consent in writing, but refusing to supply this will probably cause you to be rejected.
An important part of what they check is your credit score, either in detail (like, unpaid bills from five years ago may not matter much to them) or just like the basic number. This may seem unfair, and in many cases it is, but experience has shown landlords that bad credit affects not only a person’s ability to pay rent, but also serves as an indication of how they will treat an apartment. In other words, a credit check is a kind of quick-and-dirty personality test for you as a tenant.
Do You Need Good Credit to Rent an Apartment?
The sad truth is that people with low credit scores have a much more difficult time renting an apartment, at least if they want to live in areas that are in high demand. Let’s take a look at what you can expect in today’s market; bear in mind that landlords may be will willing to bend the rules slightly if there are many vacancies around and not many people looking to rent. The property managers of large buildings typically have less leeway.
Can you get an apartment with a credit score of 500?
If your credit score is very low, or even non-existent (like with many people starting in life have), you may find it tough to get into a good rental property. Still, assuming that you’re able to show a full credit report to a landlord (instead of them using a tenant screening service that only tells them whether or not you meet some minimum standard), you still have a shot. If you don’t have any major black marks against your name, like a car being repossessed or a credit card being charged off, they may be willing to look at previous landlords’ references, proof of income, and other factors in addition to credit scores.
Can you Rent a Place with a credit score of 600?
The 600 region is doubtful territory for many landlords. Credit scores in this range don’t necessarily indicate either financial recklessness or stability, so having someone with better credit co-sign the lease or offering to pay the first three months in advance will generally get you into even sought-after properties.
It’s very important that you know your own credit report and be prepared to talk frankly about any problem areas with your landlord. If you still owe back rent, for instance, but you weren’t actually evicted and are working to pay back your former landlord, a mediocre credit report can be counterbalanced by demonstrating your good faith.
Is 650 a good credit score for renting an apartment?
Any credit score above 650 is considered good and will probably be enough to land you an apartment in a really popular neighborhood, even while the economy is booming. Unless you have a criminal record, a history of lawsuits, or something similar in your past (which a comprehensive tenant background check will, in fact, turn up), your credit score alone should qualify you.
Additional Tips for Renting with a Low Credit Score
- Ask friends who will vouch for you if they know anyone who has an apartment for rent.
- Private owners often don’t check credit scores, preferring to trust their gut.
- If your landlord is on the fence, showing references from previous landlords, offering to set up automatic payments, or demonstrating that you prefer cash over credit cards can go a long way.
- Even if your credit score is terrible, it pays to explain why. Divorce, medical bills, or overusing a credit card when you were young are all respectable excuses for a low score.
Fix Your Credit Score for Next Time
Finding a good apartment for rent in a nice neighborhood can be like pulling hen’s teeth if you have bad credit. The experience may be painful, but it is also an opportunity to realize how much influence credit bureaus really have over your life. Even if you never paid much attention to your credit before, you know now that the results of a credit check can affect your whole life, including when looking for work.
You might want to start turning things around as far as your credit is concerned: pay off those credit cards as soon as possible, settle bills promptly, and make sure your landlord reports your rent payments. It takes time to lift your credit score out of the gutter, but doing the right things consistently is sure to make dealing with landlords easier the next time around.
These lessons can be tough to learn, but hopefully, we at DirectLoanTransfer can help smooth the way. If you enjoyed reading this or have some tips you’d like to share with others, please let us know in the comments.