No Credit Check Apartments: How to Get an Apartment with Low (or No) Credit
No credit check apartments can seem like a lifeline for those without credit or low credit scores.
Of course, no credit check apartments aren’t the only option for those without credit. You don't have to rely on no credit check apartments to rent with low credit.
This guide will help you understand no credit check apartments and layout all of your options for renting with low credit. Let's dive in!
What are No Credit Check Apartments?
No credit check apartments are apartment units that don't require a credit check as part of the rental process.
This is a shift from the traditional rental process, where landlords perform a credit check during the tenant screening process.
In theory, any apartment could be a no credit check apartment. However, finding an upscale or luxury no credit check apartment unit is almost impossible. These apartments are usually rented out by landlords in search of eager renters.
For prospective renters, there are several risks involved.
It’s important to be critical and wary of no credit check apartments. Usually, landlords choose to forego a credit check because they are desperately looking for tenants to fill the space.
In some cases, no credit check apartments may be undesirable, your landlord may be unprofessional, or you may be the victim of a scam.
Why Do Landlords Perform Credit Checks?
So what is the point of credit checks for landlords?
The tenant screening process's primary goal is to vet prospective tenants to ensure they will fulfill the duties of a good tenant.
A huge part of this screening process is determining whether a tenant is likely to pay on time and in full. Landlords rely on credit checks as a determining factor.
Credit checks give landlords an overview of your financial debt history. Do note that a credit check won't show financial information such as how much you earn yearly or how much is in your bank account.
Rather, they provide information about whether you have a history of paying your debts on time and managing your finances responsibly. They will show any outstanding debts, your credit scores from major bureaus, and any loans you may have taken out.
The logic is simple. If a tenant has a proven history of not paying off debts on time or a history of incurring substantial debt, they are probably not likely to pay their rent on time and in full.
How to Get an Apartment with Low Credit
Generally, prospective tenants should have a credit score of 650 or higher to rent an apartment. A score in this region indicates that the prospect has a solid history of paying off debt and managing their finances well.
If you have a credit score that's lower than the 650 minimum or you do not have credit at all— don't worry. Your chances of successfully renting your dream apartment aren't in the gutter.
The good news is that many landlords won't discount a tenant solely because of the results of their credit check.
However, you will have your work cut out for you. You'll have to put in a little extra effort to help convince a landlord that you are a great prospective tenant.
Although applying for a no credit check apartment may seem like the easiest way to circumvent the obstacles presented by a low credit score, it can be a very risky move.
If you want to avoid a massive headache in the future, it's best to pursue a traditional credit check apartment.
Here are some valuable tips to help you land a great apartment with low or no credit.
Get a Cosigner
The major challenge of having a low credit score is that it can be difficult to convince a landlord that you will be able to pay rent. That's where a cosigner comes in.
A cosigner is someone who voluntarily takes on the responsibility of paying rent if you are unable to pay. From a landlord's perspective, this offers a stronger guarantee that they will receive rent payment.
Cosigners are typically required to have a much higher income and credit score than a traditional renter. As it's a major responsibility to take on, cosigners are typically parents or very close loved ones.
Pay a Higher Security Deposit Upfront
Typically, a landlord will collect a security deposit to offset the potential costs of property damage, missed rent payments, cleanings, and key replacements.
A landlord will often require a month's rent payment as a security deposit. However, many states allow a landlord to collect more.
Look up the laws in your state and offer a bit more for your security deposit if possible. As long as you don't cause any damage, respect the property, and ensure that you pay your rent on time, you'll receive your full deposit back.
Offering a higher deposit upfront shows your landlord that you are serious about renting their unit and aren't afraid to put your money on the line.
Use Previous Landlords as References
In some cases, positive landlord references can be just as influential as a high credit score.
It makes sense. If you were a headache for your previous landlords — they might welcome the opportunity to help others avoid repeating the experience.
If you have a positive landlord reference, be sure to highlight this for your new prospective landlord.
In addition to providing evidence of your history of on-time rent payments, a landlord reference can provide bonus points in the responsible tenant category.
Show Proof of Income
The best way to convince a prospective landlord that you will be able to cover the cost of rent is to show rather than tell.
Be prepared with proof of income to demonstrate your financial security and ability to pay rent. Most landlords look for a monthly pre-tax income that is at least three times the cost of the rent.
Use our rent calculator to help you determine how much you can comfortably afford in rent.
Pay stubs, tax filings, and bank account statements are all viable forms that can serve as proof of income.
Rent with Roommates That Have Good Credit Scores
Renting with roommates can have benefits that extend well beyond the reduced rent rate.
If you're lucky enough to be renting with roommates who have good credit scores and meet all the other criteria of good tenancy, your prospective landlord might be more willing to rent to you.
Not only will this lower your rent burden (indicating that you'll have an easier time paying it), but your roommates will serve as informal cosigners.
If you are all on the same lease, you are all responsible for covering rent. To avoid facing the potential consequences of nonpayment, a roommate will usually step up to cover the cost of your rent if you can't pay it.
Strategies to Improve Your Credit Score
If you want to strengthen your position as a prospective tenant, giving your credit score a boost can make a big difference. Although credit scores are notorious for taking a long time to increase, there are some simple ways to improve your credit score in a few weeks rather than months. Here are a few tips to help you improve your credit score in a short period.
- Become an Authorized User: Ask a close relative or loved one whether they would be willing to name you as an authorized user on their credit card account. If they have a history of excellent credit and a high limit, you may experience a substantial credit score boost as an authorized user. The risk is minimal for the account owner, as they don’t have to share any of the account information with you for you to get the boost.
- Pay Down Debts: One of the most important factors that contribute to your credit score is the percentage of available credit used. Ideally, you want to keep your credit use below 30% of your available credit or else your score may be negatively impacted. You can pay down your debts as a means to reduce this number, which can increase your credit score.
- Ask for a Higher Credit Line: You can decrease your credit use percentage by asking for a higher credit limit. For example, if you owe $500 with a limit of $1,000, your credit use percentage will be a high 50%. However, if you owe $500 with a credit limit of $5,000, your credit use would be a low 10%.
- Get a Secured Credit Card: A secured card is a great way to build a credit history if you don’t have one, which can help improve your overall credit score. These cards are usually funded via a cash deposit upon opening. For example, if you deposit $500, that amount becomes your credit line limit. You essentially borrow your own money and may have the option to upgrade to an unsecured (traditional) credit card in the future.
- Review Your Credit Report: In some cases, your credit score may have dipped due to an error recorded in your credit report. These errors can be difficult to identify and even harder to remove. That said, it’s worth reviewing your credit report to ensure that it’s error-free.
- Take out a Loan: Though it may seem counterintuitive to incur more debt as a means of increasing your credit score, it’s a proven method. Due to the nature in which credit scores are recorded, mixing up the type of credit you have may help your credit score increase. If you have a lot of revolving credit (think: credit card lines), consider taking out an auto loan to give yourself a mark in the installment credit category.
Renting an apartment with low or no credit is challenging, though it’s not impossible! You don’t have to take a risk with no credit check apartments.
Putting a little extra effort upfront can help you land your dream apartment in any city!
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