How To Get An Apartment With Bad Credit: A Complete Guide

If you’re hunting for an apartment and have a low credit score, it can be difficult to get approved. But some landlords may be more lenient with your credit history. Read on to learn how to get an apartment with bad credit by making your rental application more appealing.

Can You Get An Apartment With Bad Credit?

Landlords want reliable tenants who pay their rent on time. If you have a low credit score, there are ways that you can show you are financially dependable. This may involve showing sufficient income to cover rent, getting reference letters from past landlords, or adding a cosigner to your rental application. Sometimes, landlords may be more lenient about your credit history and willing to approve your application.

What Credit Score Do You Need to Rent an Apartment?

Credit scores typically range from 300 to 850, and a higher number is more desirable. A FICO^® Score between 670 and 739 is generally considered a good credit score. From 740 to 799 is considered very good, and from 580 to 669 is regarded as a fair score.

The credit score required to get approval for a rental application varies depending on the landlord or property management company. However, most landlords want applicants with a score of around 625 or higher.

What Do Landlords Look For In A Credit Check?

Landlords typically conduct credit checks to help determine if a prospective tenant is financially responsible and able to pay rent on time. Credit score is one large factor that helps landlords understand how you’ve handled your debts in the past. A higher score signals that you are likely to make on time payments in full. During a credit check, landlords may also look for:

• Payment history: They want to know if you have a history of paying bills, loans, and credit cards on time. Consistent late payments or defaulting on loans can be a red flag.
• Rental history/previous evictions: Landlords often check for past rental history and any prior evictions. A clean rental history with no evictions is ideal.
• Debt levels and credit utilization: Landlords may consider your existing debts and financial obligations to gauge your ability to manage rental expenses. 

Also, landlords often ask for pay stubs or proof of income and even bank statements with your rental application. Your credit report doesn’t provide information on your income, so landlords may seek other ways to ensure you have the needed funds to pay your rent. In addition, some landlords may also conduct a criminal background check to assess potential safety risks.

Tips For Renting With Bad Credit

If you don’t have a good credit history, use the following strategies to boost your chances of being approved on a rental application. These strategies can be used in conjunction with taking steps to raise your credit score overall.

Check Your Credit Report

It’s helpful to obtain copies of your credit report to know what information your potential landlord will see.

Pulling credit reports from the three major credit bureaus allows you to have the same information as potential landlords because your credit history and score can vary by credit bureau. You can get these for free once a year at AnnualCreditReport.com. Once you get your credit reports, look for inaccurate information and start a credit report dispute to remove errors.

Use A Co-Signer On Your Lease

A co-signer is a person who agrees to be responsible for rent payments, damages, late fees, and other expenses if the tenant doesn’t pay. Finding a co-signer can make your rental application more appealing if your credit score is low.

If you miss payments or are evicted, your co-signer is also on the hook for the outstanding balance. Many parents or family members are cosigners on leases when young adults rent their first apartment because they may have an insufficient credit history.

Get A Rental Recommendation Letter

A letter of recommendation can improve your rental application if you have poor credit. This letter is a personal endorsement from a prior landlord, property manager, or roommate who can vouch for you being a reliable and responsible tenant. They can highlight your positive qualities, such as your history of paying rent on time, maintaining the property, and being a respectful neighbor.

This information can reassure the landlord that you are still a trustworthy and dependable tenant despite your less-than-ideal credit history. Additionally, a rental recommendation letter can demonstrate your dedication to overcoming credit challenges.

Show Your Good Renting History

Presenting a history of responsible renting can help counterbalance a low FICO^® Score. Landlords are more likely to approve applicants with a track record of paying rent on time, taking good care of the property, and not getting evicted. If you have been a good tenant, you can use this to your advantage.

You can provide proof that you paid your rent on time in the past. Your past rental manager may create a statement of payments, or you can show receipts or copies of rental check payments if you have them. Likewise, a positive landlord reference can go a long way in earning trust.

Consider A Private Landlord Or Rental Agent

Some rental companies may have strict policies regarding minimum credit scores for potential tenants. Some will not approve your application, even if you follow the above strategies. However, private landlords may be more willing to rent to a tenant with a lower credit score, or they might not even run a credit check. If you are striking out at getting approved by a rental agency, look for rental units from private landlords.

Consider A Roommate

If you’re having trouble getting approved for a rental application, consider applying with a roommate. If this person has a higher credit score than you, it may serve as enough justification for a landlord to accept your application, as they can be more confident at least one tenant is able to make reliable rent payments.

Prove You Can Afford Monthly Rental Payments

If you can prove you have more than enough income and can afford monthly rent payments, you may be able to get approved while having bad credit. In most cases, you’ll need to show you have three to four times the income of the monthly rent. Because your income information is not on your credit report, you would need to provide the information.

Proof of income can include tax returns, an employment verification letter, recent pay stubs, W2s, 1099s, Social Security benefit statements, worker’s compensation letters, and unemployment statements.

Offer A Higher Security Deposit

Offering a larger security deposit can help you get approved for an apartment despite having bad credit. A bigger security deposit reduces the financial risk to your landlord if you don’t pay rent on time or if there is damage to the unit.

If you can afford it, offer a higher security deposit upfront.

Look For Apartments That Accept Bad Credit

Most large property management companies typically aren’t as flexible when renting to those with bad credit. Private landlords may be more open to not pulling your credit or more willing to overlook bad credit. They may still want to confirm your income and get rental references, however.

How To Improve Credit For Renting

Improving your credit is crucial for boosting your chances of getting approved for a rental. A better credit score demonstrates financial responsibility and reduces concerns for landlords. Here are some practical ways to improve your credit:

• Check your credit report: Obtain a copy of your credit report from all three major credit bureaus (Equifax®, Experian™, and TransUnion®). Review the reports for errors or inaccuracies and dispute any discrepancies.
• Pay bills on time: Your payment history significantly impacts your credit score, so pay credit cards, loans, utilities, and rent on time. Consider setting up automatic payments from a bank account to ensure you never miss a due date.
• Utilize rent reporting services: Some rental companies use a rent reporting service to report your rent payments to credit bureaus. Another option is to use a third party for a small fee to report rental, utility, and cell phone bill payments, which can boost your credit score and history.
• Reduce credit card balances: Aim to lower credit card balances to below 30% of your credit limit. High credit card utilization can lower your credit score.
• Establish credit: If you have limited or no credit history, consider opening a credit card and paying the bills on time to establish a credit history. Some cards, such as secured or student credit cards, are specifically designed for people with no credit history.
• Diversify credit types: A mix of credit types, such as credit cards, installation loans, and retail accounts, can positively influence your credit score. Keep in mind to only open accounts you will use and can afford.
• Keep old accounts open: The length of your credit history matters, so boost your credit score by keeping older accounts open to maintain a longer credit history.
• Avoid new credit inquiries: Limit the number of new credit inquiries, as multiple inquiries within a short period can decrease your credit score.
• Negotiate with creditors: If you face financial challenges, contact creditors to discuss payment arrangements or negotiate settlements to resolve outstanding debts.
• Be patient: Improving your credit score is a gradual process that take time.
• Seek professional help: If your credit issues are overwhelming, consider working with a credit counseling agency or financial advisor to create an improvement plan.

The Bottom Line: You Can Rent An Apartment With Bad Credit

Landlords like tenants who pay rent on time and are responsible, so they may run your credit to learn about your credit history. If your credit score isn't great, there are other ways to earn their trust and improve your rental application.

The Rocket Money^SM app can help you take actions to improve your credit score. If you want to monitor your score and spending in one place, download the Rocket Money app today.