Forget buying a house, just renting with bad credit can be impossible. My credit repair story started partly because I couldn’t even find a place to live because of my bad credit. Are landlords looking for a magic number to rent you that apartment? Let’s take a look.
Your Credit Score for Apartment Rental
Since rental applications depend on the landlord or property manager, the first place to check is with the
landlords. According to the No Nonsense Landlord, the national average credit score for rental applicants is about 658.
Remember that this is an average, which means that in some cases the cutoff may be higher or lower. To put this number in perspective consider some of the statistics released by FICO, the main credit scoring company.
According to FICO, 46.7% of people have a credit score less than 700. Further, 34.5% have a credit score of 650 or less. That means that one in three Americans have a credit score less than the national average for renting.
Some landlords will have a line that will be a cutoff, while others may look at your actual credit report to spot trends and areas of concern. That’s why its important to know not only your credit score, but also what’s on your credit report. If you haven’t already, get your credit report for free.
They will be looking at whether your negative credit history was recent or long ago. They will also be looking at your history with other landlords. But they will also be looking at your score.
Renting with Bad Credit is Hard
Looking for an apartment when your credit stinks is no fun. You find that perfect place in the perfect neighborhood. You hit it off with the landlord and you are already planning where to put your couch in the living room, and then. . . .
“One more thing, I just need you to fill out this application and credit check form.”
The dream comes to a screeching halt and its back to square one. Of course, the smart thing to do would have been to ask before the meeting if credit checks were done, but I didn’t get into my credit jam with that kind of thinking. I doubt you did either. The fact is, most times it was too embarrassing. I also thought that it would be a red flag.
I knew most landlords did credit checks, but for some reason, I thought maybe they would make an exception. Or maybe I would get lucky and they would skip it because I was such a nice guy.
Just like all other aspects with my credit problems, I was delusional. I refused to face the real facts in front of me.
Reality Check: Landlords Check Credit!
According to a 2014 survey of landlords by TransUnion, 48% of landlords said that the results of a credit check were one of the top three factors in deciding to accept a lease application. In case you haven’t noticed, credit checks are becoming more and more common in all parts of life. Chances are, that number is going to continue to go up.
Put yourself in the position of the landlord. Would you let a total stranger have the keys to anything you own, let alone a house or an apartment? I wouldn’t either.
Back when I was looking at apartments, I can think of only a few that didn’t require a credit check. The problem was, they were not the places I wanted to live. You can find “no credit check apartments,” the question is if that is where you want to live.
If that’s not where you want to live, you need to fix your credit or try some of the ideas below.
Getting an Apartment with Bad Credit
People have bad credit for a million different reasons. Some have suffered legitimate financial hardship, while others may be less sympathetic. The bottom line is, most times it won’t matter. The score will tell the story for you.
So when you have a bad credit score, you basically have a few options when renting:
- Start looking for no credit check apartments and houses for rent. Like I said, if you are o.k. with this, then it might be the path of least resistance. However, if you are reading this you are probably looking for a longer term solution. Also remember that you will probably pay more in rent.
- Find someone who will co-sign the lease. If you haven’t burned all your bridges yet, this may be an option. I was never a fan of putting someone else on the line for my stupidity. However, if you are seriously committed to moving forward and taking the right steps, this may be a good option.
- Make your plea to the landlord to give you a chance. Think about it from the landlord’s perspective. They want to make sure the rent gets paid and that you don’t destroy their property. How can you demonstrate that you will be a good tenant? Do you have a good job? Despite your bad credit, is there any other way you can demonstrate you are trust worthy?
- Start to repair your credit. This is the best long term option. You can take steps today that will start the process of rebuilding your credit. Not only with this pay off in the long term, once you start you can point to your recent progress when you make that rental application.
Credit scores have become a fact of life. It used to be easier to rent if you had bad credit, but with more and more landlords checking credit scores you need decent credit to get an apartment. Landlords are not only looking at your credit score, but they are looking at the information in your credit report.
Even if you don’t want to tackle the job of raising your credit score, you need to check your credit report for errors. You don’t want to be turned down for inaccurate information.
In the long run, you will be better off if you commit to repairing your credit. Not only will your score increase, but you will have positive trends on your credit report that you can use to show your prospective landlord that you will be a good tenant.
There’s no time like now to start!
What’s your experience with credit checks and rentals? Leave a comment, we love to hear from you!