Renting an apartment is a great option for people saving up for a down payment on a house, or those unsure of where they want to settle down. It allows people the comfort of a home without being tied down to maintenance costs and the ever fluctuating housing market.
In order to rent, most landlords will need to obtain a credit report on you. It is their way of checking to make sure you will make monthly rent payments regularly and on time. This is one of many reasons to make sure you have a good credit score. Always make your bill payments on time and do not rack up too much debt to keep your credit in good standing.
If you do not have a credit history yet, or have had credit trouble in the past, a landlord may ask you for a guarantor. This is usually a parent or guardian with good credit history. They agree to pay your rent for you should you be unable to.
You can get a free credit report through borrowell.com by answering a few simple questions that will not affect your credit score. This is useful information to know before you decide to start apartment hunting.
Generally, a credit score in the low 600s is the minimum requirement for tenants hoping to rent. The criteria for renting an apartment are usually lower than for a home mortgage loan. Apartment leasing sources state that credit scores below 620 receive a high risk of default
rating, resulting in denials for many hopeful renters.
If there are 10 other people looking to apply for an apartment, it makes sense for the landlord to accept the person with the highest credit score. Some luxury apartments may even require renters to have scores as high as the 700s, so it is best to be aware of this as you shop around.
This does not mean it is impossible to rent an apartment with poor credit though. Landlords do not necessarily base their decision solely on the number associated with your credit score, but rather the cause of it.
If you have maxed out credit cards, make late payments, or have your wages garnished by creditors you come off as financially irresponsible. On the other hand, if you have consumer, medical, or student loan debt but make your payments on time, a low credit score may be viewed with less scrutiny.
Here are some extra steps you can take to increase your chances of rental approval:
● Don’t shop around too much. Too many credit inquiries in a short span of time can further decrease your credit score.
● Provide proof of employment. Show that you are financially responsible and capable of paying rent each month.
● Provide references. Ask your employer and past landlords to vouch for your financial stability.
● Find a cosigner or roommates. Having multiple tenants lessens the financial risk your landlord needs to take on.
The ultimate fix for a low credit score is to work towards improving it over time. Although, this isn’t a quick process so be patient with yourself and remember that making payments towards your debt and your bills in a timely manner will pay off literally and figuratively.