BAD CREDIT KEEPING YOU FROM RENTING? USE THESE TIPS & IMPROVE YOUR ODDS!
Submitted by Logan Allec - Logan is a CPA, personal finance expert, and founder of the finance blog Money Done Right, which he launched in July 2017. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money.
(Contributions are guest opinions only and don’t reflect the opinion or endorsement of Money Fit by DRS, our staff, client or other interested parties.)
Bad Credit Preventing You From Renting? Try These Tips Before You Apply Again!
There’s no question that having a bad credit score significantly impacts your offers for loans, apartments, and other investments, and you should always be looking for ways to improve your credit score.
In fact, people with credit scores of 669 or lower are considered subprime borrowers.
That said, a low score doesn’t mean you can’t find a good apartment on reasonable terms.
If you’re worried about looking for a place with bad credit, this article will help you manage the apartment hunting process and find what you’re looking for. You’ll have the information you need to search for your next apartment and avoid being denied because of your credit.
Offer to Pay More Upfront
Most landlords require some money upfront before you can move in, often including a security deposit along with rent for the first month. While they may be reluctant to accept you as a tenant if you have a low credit score, you might be able to sway them by offering to pay a higher deposit.
A larger deposit gives the landlord more money back if you can’t finish the lease and mitigates the risk associated with your bad credit. Some landlords would rather have more rent upfront, so talk to them about your credit and see if you can come to an agreement.
Whether you can offer an extra month or two in rent or something smaller, just going above the minimum puts cash in the landlord’s hand and shows them that you’re serious about the apartment. They’re less likely to take your application over others if you’re offering the same amount upfront.
Ask for References
Even if your credit score is less than perfect, you can draw on previous landlords to back up your history as a renter and demonstrate your reliability as a tenant. Most landlords will be happy to recommend you—they’re familiar with the challenges involved in finding trustworthy tenants.
If you don’t have a rental history, you might still consider asking for references from people who can speak to your character. A good word from a former teacher or employer goes a long way toward illustrating your qualities and make your credit score a non-issue.
Find a Co-signer
If you don’t have good enough credit to put your name on a new lease, you can ask someone close to you to act as a co-signer and guarantee your rent. Co-signers act as a second option in case you don’t pay rent and offer landlords a fallback for risky tenants.
Asking someone to co-sign is a major request, and they could be held liable for rent and other costs if you don’t make on-time payments. Missed payments could also impact their credit score along with yours—co-signers are considered equally responsible for the apartment.
Talk to a close friend or family member who trusts you and let them know about your situation. If you know someone who’s willing to put their name on the lease, you should be able to convince the landlord that you and your co-signer are trustworthy.
Move in with Someone
If you plan to move in to your new apartment with a roommate who has better credit, put their name on the lease rather than yours. You can then pay your portion of the rent to them rather than directly to the landlord until you increase your credit score enough to apply for your own place.
On the other hand, if you don’t have a roommate in mind, consider looking in online housing and sublet groups on websites like Facebook and Craigslist. Many people use these to advertise vacant bedrooms, allowing you to move into their place without having your credit pulled.
It’s harder to find an apartment that meets your needs when you’re concerned about being accepted, so be sure to start looking for places a few weeks further in advance if you have a low credit score.
Most people recommend beginning your apartment search one to two months before you plan to move in, so at least two months in advance is a good starting point for people with poor credit. Let agents know about your score as early as possible and ask for more information about their credit requirements.
Applying for apartments with bad credit can be a challenge, but you can get approved for a good place with a little extra planning. Once you find what you’re looking for, start taking steps to improve your credit so you can have an easier time finding apartments in the future.
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