It only makes sense to run a credit check on prospective tenants from a landlord's perspective because he wants to be as sure as possible that a new tenant will pay on time. Of course, that doesn’t help you if you've fallen on hard times and your credit has taken a hit. About one-third of all renters have found themselves in the same situation, but many of them have apartments. It’s possible to get an apartment with no credit or bad credit, but it will take some extra effort.
Do Apartments Do a Credit Check?
Many landlords and apartment complexes perform credit checks on tenants, but not all do. You can more or less count on it happening if you’re looking to rent in an upscale development run by a corporate owner or a management company. Independent landlords are sometimes more flexible.
What Does Your Credit Score Have to Be to Get an Apartment?
There’s no magic number for what your credit score must be before a landlord will rent to you, but many want to see scores of at least 620 and some rental management companies might look for scores in the 650 range. Some independent landlords might be more open-minded, however, particularly if they like you. Your score could be 600, but if you can offer a reasonable explanation – you always had pretty good credit but then lost your job – the landlord might give you a chance.
You can probably expect a landlord to turn you away if your credit score is well below 620 and your credit report is riddled with creditor judgments and defaults. This can indicate that you’re just not very reliable with money.
Is a Credit Check for an Apartment a Hard Inquiry?
A landlord’s credit check is often a hard inquiry, which can pull your credit score down a little more, particularly if you’re applying for apartment after apartment and inquiries happen repeatedly. A hard inquiry is one that results from asking someone to let you make payments on anything over a period of time. A soft inquiry is more like a summary background check; you haven’t asked anyone to extend you credit or enter into a financial arrangement with you.
Hard inquiries can remain on your credit report for two years, but they’re only included in your score calculations for one year. You’re not at a landlord’s mercy, however. You’re entitled to one free credit report a year, and asking for your own doesn’t affect your score in any way. You might ask the landlord to accept one you provide for him instead. He might agree if it’s dated – so he can be sure you’re not offering him a report from five years ago – and it might score you some points with him if you explain that you don’t want your credit score dinged with another hard inquiry. This shows that you care about your finances.
How Can I Get Approved for an Apartment With Bad Credit?
All a landlord really wants is some assurance that he’s going to be paid over the course of the lease. Some things other than your credit report might give him that assurance. For instance, consider offering proof of your income such as pay stubs. Current proof of income shows that you’re gainfully employed.
And keep in mind that the general rule of thumb is that landlords look for income in the range of 40 times the monthly rent. This means you'll need a gross income of $40,000 if you’re attempting to rent a $1,000-a-month studio apartment. That $2,500-a month-townhouse on the bay would require income in the neighborhood of $100,000 a year. You might want to sweeten the pot and provide the landlord with your bank statements, showing that you have a reserve of cash as well.
You can also offer to put down a larger security deposit if you can swing it, but get it in writing that any extra money you provide over and above what he initially asked for is intended to cover your rent if you don’t pay. Make sure the extra deposit is refundable when your lease ends and you’ve paid your rent on time every month. Your landlord might even require this if your credit is particularly shaky.
You can also ask previous landlords for letters of referral if you’ve rented before and have historically paid on time, or ask other reputable people who can vouch for your sense of responsibility, such as your employer.
And while you’re negotiating, try to convince your landlord to report your timely payments to the credit bureaus. Use your lease as an opportunity to improve your credit history.
Do You Need a Cosigner to Get an Apartment?
In some cases, even an independent landlord won’t be willing to rent to you unless a cosigner enters into the lease with you. This can happen if you’re young and have no credit history or rental history at all.
Enlisting the help of a cosigner is often a last ditch effort because you’ll be putting someone else on the line for your rental payments. If you don’t pay, your cosigner will be legally bound to come up with the money. If the landlord gets a judgment for the money owed or turns the matter over to a collection agency, your cosigner’s credit will suffer. And keep in mind that the landlord will want to check your cosigner’s credit as well. If you do go this route, make sure it’s someone with very good credit.
Of course, there’s a much easier way around all this. Why not just look for a roommate instead?
- Trulia: How to Get an Apartment With Bad Credit
- Washington Post: How to Secure an Apartment When You Have Bad Credit
- Bankrate: Does Rental Application Hurt Credit Score?
- The Street: Will Cosigning on an Apartment Lease Hurt Your Credit?
- Apartment Search: The Apartment Credit Check – Hard or Soft?
- Military.com: What Is a Good Credit Score for Renting an Apartment?
- JMZ Property Management: What Credit Score Do I Need to Rent an Apartment?
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Beverly Bird has been writing professionally for over 30 years. She is also a paralegal, specializing in areas of personal finance, bankruptcy and estate law. She writes as the tax expert for The Balance.