So you’re ready to rent an apartment – but maybe you’re worried about landlords checking your credit. What credit score do they require, and will you pass?
Renting an apartment is definitely easier than getting a mortgage, but you’ll still need good credit. Landlords take a big risk when they rent an apartment. They want to know their tenant is financially responsible and more likely to pay rent than default on it.
Just what credit score do you need to qualify?
Here’s the long and short of it. You need ‘decent’ credit to rent an apartment. If you’re renting in the middle of nowhere in Virginia, you may only need a 620 credit score. If you’re renting in the heart of New York City, on the other hand, you may need a 740 or higher. You’ll find that credit score requirements fall in between these two numbers quite a bit.
The exact credit score required varies by the landlord, the area and the circumstances. A busier market means more renters are looking for homes and landlords can hold out for those with higher credit scores. A slower market may give you a little more freedom. If you have ‘other factors’ that make up for a lower credit score, they may convince a landlord to approve you.
What should you do if you don’t have a great credit score? You can try:
You may even be able to explain your way out of your ‘bad credit,’ depending on the reason and the landlord’s tolerance.
Read below to learn more details about what credit score you need to rent an apartment today.
As you might expect, the higher your credit score is the better your chances of approval. Landlords want responsible renters – they don’t want to take on tenants that may or may not pay their rent.
Just what is a ‘great’ credit score? It depends on your market and the type of landlord you’re renting from. On average, expect landlords to look for a 680 or higher credit score. Of course, check with your area to see what the average landlord requires.
Just like when you buy a home, the busier the market is, the more competition you’ll have to face. In a busy market, landlords don’t have to take on tenants with mediocre credit scores. They can hold out for those with ‘great’ credit scores. If you shop for an apartment during the ‘hot’ months, especially during the spring, expect landlords to look for higher credit scores or to be beat out by the competition if their scores are higher than yours.
The more competition you have, the better your credit must be. Does this mean you need perfect credit? It probably doesn’t, but you can bet that a landlord will choose someone with perfect credit over someone with ‘so-so’ credit any day.
If you have ‘so-so’ credit, you may find a decent apartment without a problem, but the moment you move into the more affluent areas, the game changes.
Landlords in gentrified areas or with larger, renovated properties have more at stake. They need tenants that will pay their rent on time beyond a reasonable doubt. Suddenly, an ‘okay or fair’ credit score isn’t going to cut it. Only the best will win.
Now, what happens if you have ‘not so good credit,’ but there’s a reason for it? Maybe you fell on hard times but have since picked up the pieces but your credit score doesn’t reflect it. You may be able to get by with a proper explanation.
Try some of these tactics to get the apartment you want:
Was there a mistake on your credit report? Explain the mistake and show the landlord proof of it while you wait for the credit bureau to correct the issue. It’s best if you have the issue corrected with the credit bureau – but because that can take time, just be honest with the landlord.
Do you have a collection account? Some landlords immediately turn down applications if there’s a collection on the credit report. What if the collection was an oversight or a misunderstood medical bill? Explaining collections can give you more credibility than a credit report offers. Provide your personal explanation and any proof you can supply to back up your story.
Did you experience a one-time issue? Maybe you fell ill and got behind on a few bills or you lost your job and had to cut back for a while. Whatever the case may be, explain it. If you have proof to back it up, your story will have even more impact.
What if you don’t have any fabulous explanations that make landlords change their minds? Are you out of luck? There are still a few tricks that you can use:
Get a co-signer – Will someone be living with you? If he/she has good credit, definitely put that person on the lease. If not, do you have a close friend or family member that is willing to co-sign the lease for you just to get you started? As you build up your credit, you can work your way up to qualifying on your own, but in the meantime, a consigner can definitely help.
Have proper proof of your income – Is your income higher now than it was before? You may be better able to afford your bills than when you met with hard times. Prove the increase to the landlord. Show him/her how you’ve improved your financial life and when given a chance can prove financial stability.
Make a larger deposit. If you have the money, put down three months’ rent rather than the one month the landlord requires. Or offer other collateral that shows the landlord you are serious about renting the apartment and are willing to offer up something of your own to prove that you’ll make your payments on time.
Of course, if you find yourself in a situation where the landlord won’t budge or in a market where only high credit scores are allowed, you’ll need to raise your credit score. Just how can you do it? While these steps won’t make your score change overnight, with consistency, they can help your credit score increase:
Get up to date on your bills – Did you fall behind on some bills? Any bills paid more than 30 days late hurt your credit score. In fact, your payment history makes up the largest portion of your credit score. It’s vital that you get caught up as you’ll see the largest impact on your credit score.
Lower your balances – If you have more than 30% of your credit card limits outstanding, you’re hurting your credit score. Do what you can to pay those balances down, whether you have to cut expenses elsewhere, get a second job or start a side gig.
Leave your accounts alone – It’s crucial that you don’t add or take away any accounts currently on your credit report. Adding new accounts brings your credit score down because it lowers your credit age. Closing old accounts that you no longer use can have the same effect as the older accounts help your credit score ‘age.’
Use a credit builder service – If you need help building your credit score back up, a credit builder service is a free way to thicken your credit file, improve your payment history and ultimately increase your credit score.
You need at least ‘good’ credit to rent an apartment, but in some areas, you’ll need ‘great’ credit. If you don’t think you have either of those, it’s time to take a look at the reasons and see what steps you can take to fix it.
Q. Can I rent an apartment with a 600 credit score?
A. Yes, you can still find an apartment for rent with a credit score of 600. And just because you probably won’t get a dream apartment in a luxury high-rise, doesn’t mean you have to rent an apartment that’s falling apart. If you have a lower credit score, consider adding a cover letter to your rental application. This is a good chance for you to let the landlord know about yourself, your rental history and why your credit score may not be up to par at the moment.
Q. Can I rent an apartment with a bad credit score?
A. Most creditors consider scores below 580 to be a ‘bad’ score. However, you don’t have to live with your parents or crash on a friend’s couch forever if you have a bad score. Consider asking a friend or relative to co-sign a lease with you to improve your chances of landing an apartment. As long as you can make your rent payments on time, and your co-signer understands they’re on the hook if you don’t, this could be a great way to get an apartment with a bad credit score.
Q. Can I rent an apartment with a low credit score?
A. Where you live makes the biggest difference in how high your credit score needs to be to rent an apartment. Living in San Francisco requires a higher credit score to rent an apartment than living in a small town or a suburb. Considering where you live, a good credit score could still be considered too low to rent an apartment. If you have a low score, one of your best bets is to look for an affordable apartment and a landlord who’s willing to discuss your financial situation. You might be surprised at the number of landlords who are happy to overlook a low credit score if you can prove you’re able to afford the rent.