Tenants are often concerned about their credit score when applying for an apartment.
A low credit score may result in paying a larger deposit, higher rent, or being completely turned down for an apartment!
Therefore, it’s crucial to conduct some preliminary research. This will help you get the answer to the issue because applying for an apartment is already a time-consuming and perhaps expensive procedure.
With that in mind, here are a few factors that affect credit score, how you can improve it, and if you can apply for an apartment with a score below 500.
How to Get an Apartment on Rent with a Bad Credit Score
While having a minimum credit score of 500 may give the impression that people with credit scores on the lower end of the spectrum aren’t eligible for apartments, that isn’t true.
Many landlords are prepared to consider all factors before making a decision. Therefore, getting an apartment isn’t always about fulfilling a set minimum credit score requirement.
Diligence is important when getting an apartment with a bad credit score. Additionally, focusing on the ideal properties could improve your chances of being accepted.
Even if you might not be able to get the apartment of your dreams, you can probably locate a place that will work for the time being.
Then, by making wise financial decisions, you can raise your credit score and eventually move to your dream apartment.
So, in light of this, here are a few ways you can get an apartment with a bad credit score:
Focus on the Most Favorable Components of Your Application
If you have a credit score below 500, highlighting the components of your application that work in your favor is a no-brainer.
Highlight your stellar references or the length of time you’ve worked at your job. You can also emphasize features of your way of life that would make you a desirable tenant.
For instance, there is a low likelihood that the landlord will receive a noise complaint about you if you are rarely home or work long hours.
Alternatively, if the apartment allows pets, but you don’t have any, you’re inherently less likely to damage the property.
Ultimately, think of unique ways to demonstrate your strengths as a renter and do your best to emphasize them.
Provide Excellent References
At the end of the day, landlords search for tenants they can trust to pay the rent on time and maintain the unit. So, if you have a low credit score, giving strong references can be enough to get you the rental. If possible, references from past landlords should be provided, but if not, character recommendations from your coworkers or managers may be adequate.
Ultimately, it’s important to show that you are a law-abiding person who will treat others respectfully and adhere to apartment rules and regulations.
Get a Roommate
While sharing an apartment with a roommate is not something you would want, doing so can help you qualify for a rental that you otherwise might not be able to get.
So, inquire within your friend circle or at work. Like you, someone else probably wishes they could afford a nicer apartment but finds it difficult to do so independently.
Shared housing doesn’t have to be a long-term commitment. However, it is something that will help you save money for a better apartment in the future.
Plus, if your roommate has a credit score, it will do wonders for your apartment application. And you would want to take advantage of this without any second thoughts.
Look for Less Expensive Apartments
Some apartment owners would want you to show that your monthly salary is around three to four times more than the rent.
Even if you have few additional monthly expenses, landlords generally avoid giving apartments to tenants with a high rent-to-income ratio.
So, looking for apartments with rental prices two to three times less than your monthly income would be a better option in such a situation.
Once accepted, be a model tenant, get a great recommendation, and utilize it to gain entry to a nicer apartment later.
Get a Cosigner
Adding a cosigner to the lease may be sufficient to advance your application, especially if you have a credit score of 500 or less.
However, ensure you can afford the payments. After all, if you default on monthly rent payments, your cosigner will be responsible for it.
This can put your relationship with your cosigner at risk, and they might end up opting out of the lease.
Pay an Extra Month’s Rent Up Front
The apartment management receiving rent payment on time is what counts when renting an apartment.
They will be much more likely to accept you, credit problems and all, if you are prepared to provide the entire lease term up front, several months’ rent in advance, or a higher security deposit.
You must pay more than just the first month’s rent and a small security deposit up front to rent an apartment. Consider it a negotiation term that will work in your favor.
In fact, doing the above might also put you in a good position to negotiate and lower the amount you have to pay per month.
Be Transparent About Your Credit Score
Don’t try to hide your credit report, as landlords will want to see it ASAP, regardless of your credit score. So, being transparent and upfront about it might work in your favor.
So, talk about the problems you’ve encountered in the past with your landlord. This is particularly true if the issue that caused your bad credit is now resolved.
For instance, explain your previous causes of bad credit scores. This is especially true if you have a stable job today but were unemployed in the past.
Who knows, the apartment owner might understand and relate to your struggles and give you the apartment anyway. Ultimately, they will respect you for being transparent and honest.
However, don’t forget to disclose everything from personal loans to medical bills to credit card debt to car loans. In fact, include debts that don’t even impact your credit scores.
Demonstrate that you have enough funds to pay monthly rent despite having a poor credit history. Here, a cover letter or a letter outlining your credit could be useful to support your argument.
Look for Apartments with No Credit Checks
If your credit score is 500 or below, you should look for an apartment that doesn’t run a credit check.
Your credit score might not be considered by potential landlords who are a single person rather than a management organization. They might completely ignore a credit score check.
Of course, a few management organizations don’t demand credit checks. However, they’re less prevalent than private landlords that don’t do this.
The Perfect Credit Score for an Apartment
According to rentprep.com, the average credit score for getting an apartment in 2020 was 638. However, this number is constantly increasing as property prices and rents increase.
On the other hand, Homeguides say that number is slightly lower at 620 points. Nevertheless, a score between 600 and 650 indicates a likelihood of acceptance or denial, with higher scores being preferable.
That said, you will be in great shape if your credit score exceeds 650. If it doesn’t, continue reading to learn how to improve your credit score by at least 200 points.
How a Landlord Assess your Credit Score Report
Most of the time, landlords will check both your credit score and report. Your credit score is a summary of what you can afford and what you cannot in many ways.
It enables them to assess your creditworthiness quickly as a whole and can be used to decide whether to read the rest of your application.
However, they will probably look at the rest of your credit report if your credit score does not instantly bar you from renting the flat.
Typically, landlords are on the lookout for potential warning signs like:
- High debt payment amounts
- Bankruptcy history
- Previous and current hard inquiries
- Accounts in collections
- Late debt payments
You may or may not qualify for an apartment depending on any of these factors and the landlord’s attitude.
Furthermore, depending on the location, there can also be state restrictions that forbid landlords from asking for specific details from your credit report.
Ways to Improve Your Credit Score by 200
Here are a few ways that help you raise your credit score by 200 points. This will leave you with an overall credit score of 700 points, allowing you to apply for better apartments.
Get Credit Cards
Generally, installment loans and credit cards will help you rebuild your credit. However, you have to ensure that you’re timely with your payments. Otherwise, it will do you more harm than good.
For instance, a person who has never used credit cards is typically at higher risk than someone who has used credit cards responsibly.
Don’t Open Multiple Accounts
If you don’t have a lot of existing credit history, the impact of new accounts on your average account age and your ratings will be greater.
Furthermore, credit limit hikes or quick account buildup may appear unsafe if you’re a new account user.
Get in Touch with a Financial Counselor
Financial counselors and credit providers can assist you greatly, especially if you suffer from financial issues. Ultimately, you won’t be able to improve your credit score overnight.
However, if you have someone constantly advising you on improving your credit score, you can quickly raise it by at least 200 points.
In the end, paying someone to help you improve your credit score to get that dream apartment is a worthwhile investment.
Get Current on Missed Payments
The longer you make timely payments, the higher your credit score will be. Poor credit performance won’t follow you forever because older credit issues matter less.
As time passes, the negative effects of earlier credit issues on your score diminish. This way, credit providers will notice that you are handling your credit well, thanks to good payment patterns.
Although it can be difficult, renting with bad credit is not impossible. Of course, you’ll need to do some hard work and be ready to demonstrate that you can afford the apartment and be a responsible tenant.
However, you can also look for apartments that don’t do credit score checks. Doing so eliminates the need to maintain a good credit score.
Sure, these apartments might not look like your dream living space. But they can help you get a quick reference, particularly if you’re a good tenant.
So, returning to our question, “can you get an apartment with a credit score of 500?” The short and sweet answer is a resounding YES, especially if you play your cards right!
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