Credit is one of the most often-checked metrics that landlords look at to see whether or not they want to rent to a particular tenant or not. But there are loads of people out there that have less-than-stellar credit scores who all still need and want a nice place to stay and call home.
So, what do you do if you want to rent an apartment with bad credit?
Paying additional months upfront, providing proof of income, and just being honest with your landlord are some easy things you can do to improve your chances of being approved even if your credit is bad.
In this article, I am going to take you through why bad credit is such a big deal to the landlord, why it matter, and the very real things you can do to rent an apartment with bad credit.
Is It Hard To Get An Apartment With Bad Credit?
The short answer is “Yes, it can be.” Everything else being equal, the lower your credit score, the harder it is going to be to rent an apartment.
That doesn’t mean that you CAN’T get an apartment with bad credit, it just means that it’s harder to do than if you walked in with perfect credit. But apartment complexes are used to this happening and so that works to your advantage.
Credit checks are done so that landlords can assess the risk they are going to undertake every time they accept a new tenant to move in. Landlords want low risk and running a credit check is an easy way to see how much of a risk any particular person happens to be.
Now obviously, your credit score isn’t something that completely and utterly defines you as a person, there is more to everyone than their credit score. But what it DOES do, is show a person’s history in paying their debts, and how responsible they have been in making financial choices during recent years.
If the tenant has a low score but doesn’t have any outstanding debt, the landlord is going to be much more likely to take them on as a new tenant because they don’t have everyone and their dog tracking them down for payments.
The credit check is ALSO going to show the person’s past record in paying their bills on time and in full.
If the credit report shows that the person stiffed their last landlord out of a couple of thousand dollars, the new landlord is probably going to have some pointed questions to the applicant as to why they should be taken on as a new tenant.
But if everything is clear, and there is some outstanding debt that the person made when they were 19, then it may be a reason to overlook most of what the credit score shows.
It is up to the applicant to show that to the landlord. It is their job to sell themselves to the landlord as a potentially great new tenant and convince them why they would make a good tenant. This is where the honesty with their landlord can be a huge benefit to the tenant.
If you are someone with poor credit and want to rent an apartment, you are going to have to show the landlord that you are able to see your past financial mistakes, know you’re not going to make them again, and show to them that you are working at climbing out of poor credit.
If you have poor credit and are not actively working at trying to better your situation, your prospective landlord is going to see that and be less likely to give you a pass. If you’re not doing the right things to help yourself, your credit score can be a HUGE anchor on your life.
How To Rent An Apartment With Bad Credit
So how DO you rent an apartment with bad credit? Let’s go down the list of what you should and should not do when applying for an apartment with poor credit.
The primary things you need to do is show them proof of income, pay a couple of months up-front, be honest to your landlord about what made your credit go down in the past, and convince them that you are a good tenant to rent to.
Pay Extra Up Front – This is what is going to go the farthest with your landlord. The entire reason they are running a credit check is to ascertain the probability that they are going to be getting a rent check from you at the beginning of every month. They want to know they are going to be receiving compensation in exchange for letting you stay in their unit.
When you boil it down, the reliability of making the monthly payment comprises a huge portion of the reasons why a landlord would decide for or against a potential tenant.
By making more monthly payments upfront, you are showing them that you are capable of making the monthly payments for the apartment, and are serious about renting with them. Giving them a couple of month’s rent upfront lowers the risk for the landlord about whether or not they will be getting paid on time or not.
Cash is king in these situations, and virtually nothing else sends the message that you are able and capable to pay for the apartment than by giving them a concrete reason to overlook your poor credit score.
This is the Number 1 thing that you should offer right off the bat before they skip over you in the piles of applications they get. Show them the money.
Proof Of Income – The next thing you are going to want to provide is tangible proof of income to your landlord, especially if your credit is bad.
It’s great that you are taking a few month’s rent in cash to the landlord in hopes that it will persuade them to take you on as a tenant, but by no means does that guarantee that you are just going to be instantly approved.
Your landlord is going to look very kindly on the fact that you are willing to offset their risk with a larger payment upfront, but they are ALSO going to want some assurances that you have the income necessary to make the monthly payments after that.
This is where Proof Of Income from your employer comes into play.
Your employer should have pay stubs that they give you or something that Human Resources or Accounting can print off for you that shows a business employs you, and how much they pay you for any given period.
Giving this documentation to your landlord is crucial in being able to make your case that you are able to meet and pay the rent each month. And bringing that straight from your employer is always the best way to go about it. Bank statements are fine, it does show deposits, but having something come straight from an employer is always going to carry the most weight.
This proof of income will also show, in a general fashion, How Much Apartment You Can Afford. Generally, the rule of thumb is that you should not spend more than 30% of your yearly income, before taxes, on your apartment rent. Or, if you want to do the calculation in another way, you should make at least 40x your monthly rent in yearly income.
Be Honest With Your Landlord – This is a MUST if you want to get that apartment and you have bad credit.
Landlords have heard every story on planet earth. They are no strangers to a long-winded story going off about how unlucky the person happened to be and why they were in the position they are now. This isn’t what I’m talking about when I say talk to your landlord. All this is doing is asking for charity. You aren’t looking for charity, you are looking for an apartment.
Speaking as a landlord, I am MUCH more likely to rent to someone who comes and tells me that they have had some problems in the past, they chose a poor roommate or significant other, got into some problems and that’s why they have a poor credit score.
Honesty about their situation shows me that the person has character. Yes, they probably didn’t choose very wisely in the past, but if they can recognize that in the present and let me know THEY know, then it goes a long way with me in seeing how mature the prospective tenant really is. Have they learned their lesson and moving on, or are they just trying to get in a situation where the same thing is going to happen to them.
Landlords can tell when a story is being spun to them. How? Because 100% of the time, the person telling it to them is the victim. They had no part in past troubles at all. This is a surefire sign that they are lying now.
However, if the tenant is honest about their past and is willing to talk about it and let me know what actually transpired, I am much more likely to let them rent from me.
Get A Cosigner – This is also another good idea on the part of the tenant. It may end up being the difference between getting that apartment and looking for someplace else of less quality and repute.
Having a cosigner on your lease doesn’t mean that the other person is going to stay in the apartment with you, just that they are vouching for you and backing it up with their wallet. If for some reason, you can’t pay your rent, they are now on the hook for it as well for as long as your lease agreement is in effect.
When you have someone willing to put their money where their mouth is, that is going to help you when getting that apartment. A landlord is again, about risk management. When you have a cosigner on your lease, that is another person who has now shouldered some of that risk for them, which makes admitting you to the complex a much more attractive course of action.
How To Get Approved With Bad Credit And No Cosigner
This may be one of the hardest scenarios to overcome. As a landlord, I urge you never to get into that position, because it makes it darn near impossible to approve your application. Bad credit means you probably aren’t a very good risk, and no cosigner means that nobody is willing to vouch for you. The double whammy.
Show your landlord a TON of income and that you are willing to prepay most, if not all, of your rent.
Pre-Pay Your Rent – This is the only tried and true way of forcing your landlord to see past your credit history and lack of someone vouching for you on the lease.
I have rented to people that don’t have the best credentials by paying either 6 months at a time, upfront, or even the entire year upfront. This is the only way I know that I am going to at least come out OK on the deal, even if they treat the apartment terribly.
You are going to have to show them enough cash that they don’t care about your past record.
Show Them A Ton Of Income – If you have a REALLY good paying job, this will be akin to paying some months upfront. Your landlord wants to know if you are going to be able to pay not only THEIR rent but all the other debt obligations you have that you are still paying off. An amazing income shows that you can cash flow all of your present and past debts.
But of course, if you have this much income to throw around, you are going to want to pay a ton of months upfront, to alleviate your landlord’s concerns.
How To Get An Apartment With Bad Credit And An Eviction – Having an eviction on your credit check can be the mark of death for many apartment complexes. Most landlords see that and just don’t want to take the chance on that happening to them.
An eviction on your credit check is going to stay there for 7 years. That’s a significant portion of someone’s life and not something to think lightly of. It can be the single-most difficult aspect of renting with bad credit that you must overcome.
In this situation, you are going to have to convince your landlord that you are worth taking the risk on again. This means telling them EXACTLY what happened when you were evicted. Even if it was 5 years ago when you were 19 years old and had a group of friends flake out on you, you STILL need to tell them the full and whole story.
Remember, the details of this are on your credit report and it only takes a google search and a phone call to your prior landlord to find out just what happened. And if you are wondering whether or not landlords call each other, read the article I wrote on this topic.
If you are in the unfortunate situation where you have low income and bad credit, more than likely you are going to have to lower your standards for the apartment complex you live in or get outside assistance from an agency, and then see if the apartment complex will take that form of payment. It’s not a situation you want to see yourself get into, so do whatever it takes to keep from getting there.
If you are looking for an apartment and you have bad credit, you are going to want to offer your landlord several month’s rent payments upfront. On top of that, show them your income, provide a cosigner for the loan, and above all, be honest with them.
You got this.
