How to Get an Apartment with Bad Credit (7 Tips)
Finding a dream apartment is difficult, and having a low credit score makes it even harder. Landlords look at credit scores, prior evictions, broken lease history, and credit judgments to determine if a renter is reliable. If your credit report has a ding in any of these categories, you will likely have to take extra steps to get your name on a lease.
However, if you follow our tips below, you can figure out how to get an apartment with bad credit.
1. Check Your Credit Report
There are three major credit bureaus - Equifax, Experian, and TransUnion. Get reports from all three because you never know which one your potential landlord prefers. If you’re short on cash, you can also request a free annual credit report from each of the major bureaus through AnnualCreditReport.com.
And remember, landlords don't just look at your credit score. It bears repeating that many will look into your history regarding evictions credit judgments and other outstanding obligations to previous landlords and utility companies.
Fortunately, there are several ways you can start cleaning up your credit report and financial history. If you owe money, pay off your debts, and request written confirmation about your payments prior to submitting your rental applications. Check carefully for errors, and if you find any, file a credit report dispute immediately with each credit bureau.
2. Look For Apartments With No Credit Checks
Most leasing and property management companies require credit checks. However, some individual landlords do not, making it easier to rent with poor credit. For example, someone who owns a condo and rents it out privately may not care about the credit check if you can prove you’re financially trustworthy.
It may seem like a score to find a landlord willing to waive the credit check, but it can also signal a red flag and potential rental fraud. Stay cautious, ask for everything in writing, and verify all details before signing a lease without a credit check.
3. Give Reference Letters to Your Landlord
A bad credit score doesn't always define your trustworthiness or credibility. Sudden health problems, divorce or job loss can also result in a poor credit score.
To prove that you are a financially responsible renter, ask your previous landlords, employers, or any other entities you had a financial relationship with to provide reference letters.
4. Show Proof of a Stable Income
Many landlords require a monthly income of 2 to 3 times the monthly rent to be considered. You might not have a great credit history, but a healthy salary that covers the rent and proves stability can improve your chances. Gather copies of recent pay stubs and bank statements to show the landlord.
If you need help determining how much rent you can afford, try using a rent calculator. This will provide a better understanding of your current financial state and what you can afford. Just plug in your household income and the amount of money you would like to save, and we’ll do the rest. As a general rule of thumb, try to spend no more than 30% of your income on rent.
5. Offer to Pay More Upfront
Sometimes landlords will require a greater security deposit to offset a bad credit history. Instead of waiting for the landlord to suggest it, offer it up immediately to increase your chances of securing a rental. Be prepared to pay up to two to three months of rent as a security deposit instead of the usual one month of rent.
6. Get a Roommate
Some landlords will allow you to move in with a roommate without having your name on the lease. This isn’t as common, but it is worth trying if you’re trying to figure out how to get an apartment with bad credit. Just make sure that your potential roommate has a good credit score and clean rental history without prior evictions.
7. Find a Co-signer
People with less than sparkling credit often get cosigners when they apply for a mortgage. You can do the same when trying to figure out how to get an apartment with bad credit.
Your cosigner (or lease guarantor) needs to have a stable income and a good credit history. However, there is some risk involved. Ensure you can pay the monthly rent on time, or your cosigner will be liable for your debt and it will negatively affect their credit. Cosigning on an apartment lease is a big favor, so make sure you only ask close friends and family.
Still need a bit of help locking down your next apartment? Here are some additional tips.
Ask to Set-up Automatic Payments
Landlords are more open-minded about a poor credit history if your current finances are rock solid. Ask to set-up automatic payments, and assure your landlord you will never be late with rent. With spotless on-time payments, your landlord is more likely to renew your lease and see you as a trustworthy tenant.
Be Honest with Your Landlord
Landlords and property managers are more interested in quality, long-term tenants that pay on time than credit scores and credit reports. Be upfront with potential landlords and offer a letter explaining your situation while sticking to the facts. They don’t need to know about your terrible break-up or student debt woes.
Consider writing, “Due to a complicated divorce, my finances took a hit and after a 10-month period, I was able to turn it around and have finished paying off all of my debt. Please see the following financial documentation that supports this.”
Or you could write, “Unfortunately, I got in over my head with student debt payments, but found a high-paying job in a stable industry where I have already received two promotions. I am now in a position where I can easily pay my rent, debts, and have money left over to live comfortably. I have included my last four pay stubs and a letter from my employer for your consideration.”
While renting with bad credit is certainly possible, you should prepare to put in extra work into your search and apartment application.
Before you get started, develop good patterns and habits by paying off your debt months before starting your apartment search. If your potential landlord sees that you are on the right track and leaving your financial struggles behind, they might be more lenient and willing to look past your prior credit issues.