4 Ways to Rent an Apartment with a Low Credit Score
While there’s no universally required credit score needed to rent an apartment, having a solid credit score can certainly help your chances of a landlord handing you a set of keys. In general, a landlord will look for a credit score that is at least “good,” which is generally in the range of 570-739. However, that can vary by landlord or property manager, as well as the location in which you’re renting.
Read on to learn more about how your credit score can affect renting an apartment — and how you can approach renting if you have a lower credit score.
What Credit Score Do I Need to Rent an Apartment?
Truth is, the answer to what credit score you need to rent an apartment is a bit squishy. In general, you’ll have a better chance of approval if your credit score is at least deemed “good.”
What’s considered good? Credit scores are generally classified as follows per FICO® (keep in mind that different scoring models may vary):
• Exceptional: 800-850
• Very good: 740-799
• Good: 570-739
• Fair: 580-669
• Very poor: 300-579
There also are variables that can affect whether your credit score qualifies you to rent an apartment. For example, if you live in a city where there is huge demand for apartments, landlords may give preference to those with higher credit scores.
Can You Get an Apartment if One Person Has Bad Credit?
If one person has bad credit, know that it will likely make it tougher for you to get an apartment. Landlords have a lot of leeway and can follow criteria of their choosing.
Still, it’s not impossible even if it is trickier. One smart strategy in this situation is to put the lease in the name of the person whose credit and income is best. You could also offer to show your income or provide a reference.
What Landlords Look at On Your Credit Report
When your landlord reads your credit report, they will be looking for clues about your financial health and habits.
Of much importance is your debt-to-income ratio. In a nutshell, this is the amount of your monthly pre-tax income that gets spent on debt payments. It’s certainly not news to you that if you’ve filed bankruptcy that’s not going to be a negative. A landlord also may be spooked if you have hefty credit card balances.
Your credit history disclosed on your credit report also may include your rental history as some landlords and rental property managers share your business to the credit bureaus. This can be plus if you’ve been doing the right thing; if not, this can work against you.
Too many hard inquiries also can raise red flags for a landlord. This is because frequently applying for different types of credit could suggest financial instability, which increases risk in the eyes of lenders — as well as landlords.
4 Ways to Rent an Apartment with a Low Credit Score
Just because your credit score isn’t stellar doesn’t mean you’re resigned to sleeping on a friend’s couch or living with your parents. There are ways to rent an apartment even with a lower credit score.
1. Pay a Higher Security Deposit
One way to show that your credit history is just history is by offering to make a higher security deposit. Say you are required to pay first and last month’s rent upfront. To sweeten the deal, maybe you tack on a couple additional months of rent.
If you want to instill confidence in your potential new landlord, this might do it. Just make sure you actually have the room in your budget to offer up the cash.
2. Get a Co-Signer
While getting a co-signer may put a damper on feeling like you’re finally a grownup, it may be worth sucking it up and getting a creditworthy parent or other trusted individual to co-sign for your apartment. This can give your landlord peace of mind if someone is willing to pay the rent on your behalf if you’re unable to.
Just keep in mind that your co-signer will be on the hook if you drop the ball and that co-signers generally must meet even steeper credit score and income requirements.
3. Play Up Your Income
Maybe your credit score is nothing to brag about, but you’ve worked hard and now have your finances in order, with solid savings and a good income. If you could show that you earn three or four times your rent on a monthly basis, that might divert attention from your lousy credit score. Additionally, if you have a solid stash in your savings account, that can also give your landlord assurance that you have the funds to cover your monthly rent.
4. Consider Getting a Roommate
Adding a roommate to your lease or rental agreement can increase your creditworthiness and your qualifying income. This is especially the case if you can find a roommate with good credit — and get your landlord to pull their credit first.
Benefits of Good Credit When Renting an Apartment
A landlord needs more than their gut instinct to help them determine who to rent to, which is why a credit score carries a lot of weight when it comes to getting your rental application approved. A good or — better still — an excellent score can give landlords the confidence to consider you for the apartment, especially if all other signals they get when checking on your background indicate they should give you the greenlight.
Having a solid credit score can help you to snag the apartment you want, and avoid the hassles associated with trying to secure an apartment when your credit isn’t as great, such as getting a roommate or a co-signer. Especially if you live in a city with a competitive rental market, a good credit score can be a serious edge.
How to Monitor and Keep Track of Credit Scores
Ideally, you want to check your credit and get a copy of your credit report before you start apartment hunting. It’s important to know where you stand and, if there are any errors, you want to fix them right away.
Until April 20, 2022, you can get free weekly credit reports from the three national credit reporting agencies, Equifax, Experian and TransUnion. To get your free reports, simply go to AnnualCreditReport.com .
While your credit report provides information on your various credit accounts and their balances and your payment history, it does not include your credit score. You can check your credit score by looking at a loan or credit card statement or through an online credit score checker. You can also buy a score directly through credit reporting companies. Even if you might have checked your credit score not that long ago, don’t skip doing so again — your credit score updates every 30 to 45 days.
If your score is low, consider taking steps to improve it before jumping into your apartment search. Actions like paying down credit card balances and making sure you don’t have any more late or missed payments for a stretch can show progress.
What’s Expected in 2022?
According to an outlook on the U.S. rental market published by the property management platform ManageCasa, demand for rentals will grow in the coming year. In fact, ManageCasa writes that the “rise in rents for the rest of 2021 and 2022 might be surprising to some.”
The report indicates that the U.S. rental property market is currently experiencing severe shortages, heightened demand and high property prices, while those looking to rent are competing with a wealthier pool of renters. This is driving up prices.
Further compounding the situation is the fact that housing prices are so inflated that the percentage of people who can afford a home has already dropped off and likely will continue to do so, according to Forbes’ predictions . This could lead to a rental market that is even more competitive, which may not bode well for those with less than stellar credit.
The Takeaway
You’ll want to shoot for having a good credit score — generally in the range of 570-739 — to get an apartment. While you may be able to still get an apartment if you don’t have solid credit, it will make it more challenging with the competition you’re likely to face.
If you have the luxury of time, do what’s necessary to improve your score so that when you begin your search you’ll be an ideal candidate. An online credit monitoring tool like SoFi Relay can make it easier.
Disclosures:
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s
website .
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SoFi’s Relay tool offers users the ability to connect both in-house accounts and external accounts using Plaid, Inc’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score provided to you is a Vantage Score® based on TransUnion™ (the “Processing Agent”) data.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
SOAD0921005
This article is originally on SoFi.
