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How to get an apartment with bad credit

Teenager girls, sisters, looking around the new empty apartment
Alex Potemkin/Getty Images
Teenager girls, sisters, looking around the new empty apartment
Alex Potemkin/Getty Images

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When you’re at the tail-end of a lease agreement, it’s time to find a new place to call home. But if you think the hard part is finding a place that meets all of your requirements, you’re missing a key component of the rental-hunting process.

Renters make up about 36 percent of the nation’s households, according to Pew Research. And before any of those individuals signed on the dotted line, their potential new landlord likely did their due diligence and ran their credit. Before a lease agreement is finalized and a tenant is approved for a home or apartment, landlords will vet them to see if their credit history is free of any evictions, history of late or missing payments, or irresponsible credit habits that could make them a financial risk.

For most landlords, a lower score could be the red flag that prevents you from making it to move-in day. Think of your credit score as the grade point average of your finances. Responsible financial habits like paying your credit card or debt payments on time and avoiding carrying a hefty balance month over month will translate to a higher score. But a late or missing payment, higher balance or too many new credit inquiries could set you up to fail.

How bad credit impacts your ability to rent

Credit scores come in all shapes and sizes. Here’s how to determine which bracket your credit score falls into, according to the FICO credit scoring model, the most commonly used scoring model:

  • Exceptional: 800-850
  • Very Good: 740-799
  • Good: 670-739
  • Fair: 580-669
  • Poor: 300-579

As a general rule, it’s typically recommended that renters try to keep their score near the 620 range or above. But your approval odds can vary depending on the individual landlord. Here’s a look at how many Americans fall into each credit score range, according to Experian.

Rating Score % of Americans
Exceptional 800-850 21%
Very Good 740-799 25%
Good 670-739 21%
Fair 580-669 17%
Poor 300-579 16%

A number of factors can ding your credit score and hurt your rental approval odds. If you have a history of making late rental payments, a previous eviction, foreclosure, or bankruptcy you could find it more difficult to get the green light from a potential landlord. Other negative credit habits like carrying a higher debt-to-income ratio, defaulting on loans under your name or auto repossessions also demonstrate to landlords that you may have trouble managing your credit and financial obligations.

If your credit score reflects any of these financial obstacles, know that many Americans are dealing with the same. And it’s not uncommon to fall within a less-than-stellar credit score range.

Average credit score by age  1

Generation Average Credit Score
Silent Generation (76+) 760
Baby Boomers (57-75) 740
Generation X (41-56) 705
Millennials (25-40) 686
Generation Z (18-24) 679

Average credit score by income  2

Annual Income Average Credit Score
$50,000 – $74,999 737
$30,001 – $49,999 643
$30,000 or less 590

Top 5 states with the highest credit scores  1

State Average Credit Score
Minnesota 742
Wisconsin 735
New Hampshire 734
Washington 734
North Dakota, South Dakota 733

Sources

  1. What Is the Average Credit Score in the U.S.? Experian.com, Feb. 22, 2022
  2. Average Credit Scores by Age, State, and Income, AmericanExpress.com, Feb. 14, 2020

Having a lower credit score could make a landlord reluctant to move forward with your application. This is especially true if you’re up against a larger applicant pool where other applicants have a better score than you do. In a crowded rental market where vacant apartments are receiving a stream of applications your credit score could play a key role in whether your application is even considered.

How to check your credit score

Avoiding any delays or obstacles during the rental process or any major financial purchase in the future means keeping a close eye on your credit score. Even if a major purchase or rental isn’t on the horizon, catching any mistakes early or making a plan to build your score back up after a missed payment will save you a ton of time and heartache later on.

You can get a free copy of your credit report once per year from each of the three major credit bureaus at Annualcreditreport.com. This will give you an idea of whether or not there are any errors on your credit report that could be dragging down your score, however, your credit score won’t be listed on your report.

Many of the top rewards credit cards offer a free FICO score on your monthly credit card statement. Capital One’s CreditWise program and Chase’s Credit Journey are also available to all consumers whether you’re a customer or not, and both let you see a version of your TransUnion credit score.

It’s also important to note that checking your credit score won’t impact it. When you’re applying for a loan or a new line of credit, it’s typically referred to as a “hard inquiry,” and will likely bring down your score. When you’re simply checking your own credit score or a lender checks your score to send you a pre-approved credit card offer, this is known as a soft inquiry.

Consider working with a different type of landlord

If you’re having a harder time securing a rental due to your credit score, that doesn’t rule you out of the applicant pool altogether. The kind of landlord you work with could make a difference. Some landlords can be more lenient than others. For example, when you rent a home or apartment managed by a property management company, you’ll likely need to check every single box to have the greatest chance of approval. These property management companies are hired to ensure that the strongest tenants are approved and accepted.

If you opt for an apartment rental owned by a private landlord, you may have a little more wiggle room. Private landlords typically own this property as an investment and tend to handle applications themselves, with their own set of requirements and expectations in place.

This doesn’t necessarily mean you’re in the clear, but the landlord may be more willing to rent their property to you if you can prove you meet their income requirements or provide letters of recommendation from someone they know. Credit score still matters, but a private landlord may be more willing to overlook a low score if you exceed all of their other requirements. Some landlords will also overlook your score if you offer to pay a larger deposit upfront.

Find a cosigner, guarantor, or roommate

A bad credit score isn’t the be-all and end-all of renting. There are a few ways you can make yourself more appealing to a potential landlord and get your foot in the door.

  • Find a cosigner: A cosigner provides landlords with an added level of protection if you fail to make your monthly payments. It reduces the financial risk involved for them, but it does mean putting a friend or family member on the hook for your rent which can be uncomfortable. Before asking a loved one to co-sign, it’s important that you both understand the risks involved. Assuming this financial risk could hurt your loved one’s credit score and increase their debt-to-income ratio, potentially making it more difficult for them to borrow money or secure a rental of their own later on.
  • Use a guarantor: A guarantor works similarly to a co-signer but has fewer rights. A guarantor vouches for you and lets the landlord know that you’re good for your money, however they are not entitled to live in the apartment or rental home.
  • Consider having a roommate: If your credit score isn’t strong enough to secure an apartment on your own, consider having a roommate who can make up for your lower score. If this individual can cover rental payments on their income, your landlord may be more willing to consider your application. Here’s a breakdown of a few key stats on roommate relationships in the US:
    • Approximately 1 in 3 American adults live with roommates who are not their romantic partners.
    • Percentage of roommates who were friends with their roommate(s) beforehand: 47%
    • Average amount a renter can save per month by having a roommate: $524

Provide supporting documents and references

Another easy way to increase your odds of approval is to include any supporting documents or references that might help explain your financial situation or show your potential landlord that you’re trustworthy and reliable. Asking previous landlords, employers or even professors to write you a reference letter could tell this landlord more about who you are and why you’d be a great tenant. Having others vouch for you and your character could make all the difference and give the landlord the reassurance they need to move forward with your application.

In addition to reference letters, you might also consider including proof of responsible rental payment history, on-time utility and bill payments, and a snapshot of your account balances to show the landlord that you have the means to make payments and have a history of doing so.

This is, of course, in addition to standard income requirements which usually ask that you earn at least three times the expected rent. When you’re on the hunt for a new home, you’ll want to make sure you have the following in hand so you can move forward as quickly as possible:

  • Copies of at least three recent pay stubs
  • An employment verification letter from your current employer
  • Reference letters for yourself and any pets showing you’re both great tenants
  • A snapshot of your savings account balance (be sure to black-out any sensitive information)
  • Proof of identification
  • Rental history

Pay more upfront

If your potential new landlord is still on the fence about moving forward with your application, you may need to consider paying a little more upfront. This could mean increasing the amount of the required security deposit or paying an extra month or two worth of rent. A security deposit is typically paid at the time of the lease signing and is used as an added buffer to protect the landlord if you fail to pay your rent or cause any damage in the unit.

Most landlords will return your security deposit to you as long as you haven’t broken any of the terms outlined in your lease agreement. In most cases, your security deposit will be equal to one month’s rent, though this amount can vary. Offering to pay a little extra could show the landlord that you’re serious about making on-time payments and plan to take good care of the unit.

FAQs

The bottom line

Your credit score plays a key role in so many of life’s financial milestones. When you’re looking for your next rental apartment or home, knowing your score will give you a better idea of which homes you qualify for, and if you’ll need to provide additional supporting documents to make yourself a more attractive tenant. The good news: Even if your score isn’t as high as you’d like it to be, there are still plenty of ways to boost your approval odds and land your dream home.

Written by
Ivana Pino
Growth Editor
Ivana Pino joined the CreditCards.com and Bankrate Credit Cards team in 2021. She graduated from the S.I. Newhouse School of Public Communications at Syracuse University with a degree in Digital Journalism and a second degree in Political Science.
Edited by
Senior Editor