Think you can’t rent an apartment with bad credit? Think again.
It’s a lot more difficult to rent an apartment with bad credit, but it’s not impossible. You have to know what property managers are looking for and need out of you, and you have to show them that you’re still someone they want to work with, even with some bad history in your background.
Here are some things that will help you:
When you sign a lease, you’re making an agreement to pay a large amount of money over time. While not exactly like taking out a loan or getting a credit card, there’s a lot of similarity. The property manager wants someone who has the least chance of not paying off the lease. When you have bad credit in your history, it looks like you’re a larger risk. Your job is to show that you’re less of a risk than your history implies, which can be done in many ways.
This isn’t going to be a simple and breezy process. Finding an apartment is time-consuming even under the best circumstances, but especially when you have more constraints on your situation. The time it will take to find someone willing to rent to a tenant with bad credit, and to negotiate an agreement that works for everyone involved, means that you need to budget a lot of time to this process.
Waiting for the property manager to get your credit report to see the problems is only going to cause problems. It’s going to look like you were trying to hide something, which is a bad way to start things off. Instead, proactively tell them about the issues in your past. If it’s a deal-breaker for them, then they were going to find out when they checked your credit report anyway, and this way you get off to a more honest start.
If you have bad credit or very little credit history, getting a co-signer may help you land an apartment. Having a co-signer on an apartment lease is a bit like putting up collateral for a loan. Essentially, a co-signer is a guarantor. This person would most likely be a trusted family member or close friend (with good credit) who’s willing to sign their name on your lease, assuming financial and legal responsibility for your apartment if you default on rent payments.
For property managers, having the guarantee that rent payments will be made under any circumstance might convince them to rent to someone who’s recently gone through some financial difficulty.
A security deposit is less money that the property manager has to risk. It’s not a payment you’ve promised to make in the future, but money they have before you’ve moved in, and so the risk they face of you not paying in full is significantly less. If you have the money in savings, you can take this much further: offering to pay multiple months’ rent in advance. Doing this shows you have the money to make payments now, so you’re more likely to have that money in the future.
Because automatic payments are quick and easy for both payees and businesses, offering your landlord the ability to automatically deduct monthly rent payments right from your bank account is another good tactic for landing an apartment. You may want to propose this option up front, and if you do, you’ll likely need a letter of employment verification to prove that you qualify.
Your bad credit will be a lot less of an issue if it’s about things in the past. Go through the report to see what’s causing your credit to be bad and be prepared to show how you’re working those issues off. Point out the issues you had in the future and show them anything about your current situation to show that you’re doing better: higher income, money in savings, and taking on less debt are areas that can show a clear improvement. Bank statements and bills will help greatly to show that your credit history is your history, not your present.
Your general credit report is only a proxy for what landlords want to know. If you had trouble paying off credit cards but always paid your rent on time, the second is much more important. If you’ve had a good history of paying your rent on time at a previous apartment, especially in the form of a recommendation from your former landlord, it can greatly help you with your next apartment.
In general, the more honest you can be about your credit situation — and the more options you can offer a potential property manager — the better. It may take you a bit longer to find someone who will work with you, but it’s possible to rent with credit obstacles when you’re willing to be flexible.
More about credit — the good, the bad and the ugly: