How to Rent an Apartment with a Bad Credit Score - Redefining Progress

How to Rent an Apartment with a Bad Credit Score

As a renter looking for a new apartment, it’s important to have a decent credit score because it shows your potential landlord that you’re financially responsible. How you present yourself to a landlord can also make a huge difference, especially if you’re looking to rent in a busy market like Austin or Seattle.

However, if you’ve had financial issues or are just starting out and your credit score is almost nonexistent, there are some ways to increase your chances of getting an apartment. Below are some options for securing an apartment lease with a bad credit score.

Own Your Situation

Being aware of your credit score and owning up to it can be beneficial, so check your credit score and find out exactly what caused it to be so low. For instance, medical bills, a divorce, job loss or credit card debt can damage your score. However, these are all situations that you can explain and, if you’re honest about them, circumstances could very well change in your favor.

Specifically, know what your personal situation is and be prepared to resolve it. And, when speaking with a potential landlord, tell them up-front that you’re aware that your credit score is poor, but that you can show proof of a steady income and that you’re working on improving your credit.

Often, being honest can go a long way. Most landlords will run a credit check on a potential tenant and if they know about your situation beforehand, they can manage their expectations. Plus, if they understand your situation, they may be willing to look past the low score. Whatever you do, don’t try to hide the facts. That will only raise further suspicions and work against you during the application process.

Prove Your Trustworthiness

Meanwhile, to encourage the landlord to potentially overlook a bad credit score, demonstrate that you’re reliable and trustworthy. For example, providing recommendations from a previous landlord or employer can help a lot. Additionally, provide their contact information in case the landlord wants to verify the source.

Along the same lines, you should also be able to prove that you have a steady income and can handle move-in fees and the cost of rent. As a general rule of thumb, it’s best if your monthly income is at least three times the cost of one month’s rent, which shows that you’ll be able to keep up with your payments. But, before you even start looking for apartments, use a rent calculator tool to find out how much rent you can afford and browse apartments in that price range.

Get a Co-Signer

If you’re just getting started on your journey to financial independence, it could take a while to establish a reliable credit score. So, until then, consider asking someone with a good credit score to be your co-signer. By doing so, they guarantee to your landlord that if, for some reason, you’re unable to pay your rent, they’ll step up and pay it for you. Keep in mind that you will still be responsible, so make sure you keep up with your payments to build reliability and trust.

Work on Your Credit Score

Ultimately, the best solution to bad credit is to start improving your credit score. First, work on paying down all of your debt and any late payments. Late payments, in particular, stay on your credit report for seven years, so it’s essential to pay them off as soon as possible or at least start working on a payment plan to help relieve some of the debt.

Next, to build up your actual score — especially if you truly don’t have one — start using credit cards responsibly. That means getting a credit card with a low credit limit that you know you can always pay in full when it’s due. For example, use this credit card to pay for your groceries and other daily or weekly costs that you’d typically pay for with your debit card. Then, simply transfer the sum from your debit account to pay off the credit card.

Finally, start keeping track of your money — how much you earn, how much you spend and on what. Keeping a budget and knowing your financial situation is the first step toward becoming financially responsible.

Remember, this is a journey and it will not happen overnight, so don’t let the process intimidate you. Rather, start working on one issue at a time. In time, it will become easier to manage your finances.