How to rent an apartment when you have bad credit

Image for article titled How to rent an apartment when your credit is in the toilet

Photo: Ryan DeBerardinis (Shutterstock)

Jthere was a time when renting an apartment involved walking around the premises for a few minutesdeciding that you wanted it, then signature of a lease and delivery of a security deposit. Those the days ended when the concept of a credit score appeared in the late 1980s.

Originally designed to help financial institutions assess credit risk, credit scores have metastasized in almost every aspect of our lives. A poor credit score (generally considered below 600-650, although in competitive rental markets, this number could be higher) will negatively impact your chances of getting not just a loan, but a job, and even a place to live.

This creates a sinister feedback loop for those with bad credit: You can’t find a job or an apartment because you have bad credit, and you can’t improve your credit because you can’t find a job or an apartment. If you’re having trouble landing a decent rental because of bad financial decisions made by Past You, do not despair. It’s not easy, but there are still ways to get a decent flat if your credit isn’t so hot.

pay the poor man’s tax

The old adage that it’s expensive to be poor applies in this situation, because one of the most effective ways to convince a landlord you are a good risk despite a bad credit rating is to offer them more money in the form of a higher security deposit. Some states limit homeowners to a specific amount (usually 1–2 months rent), while some states allow more– and some, like Colorado, have no limits. Whatever state you live in, you can allay your landlord’s fears by putting more money up front– and if you’re a responsible tenant, you’ll get that money back when you move out.

If that’s not enough, you can come up with a few other things:

  • If you can, pay in advance in addition to your security deposit. Offering the landlord a few months’ rent in advance will be very persuasive.
  • Offer to set up automatic payments. A landlord’s worries might be allayed if they knew they wouldn’t have to sweat you for a check every month.

VSco-signers, roommates and references

Another strategy requires the help of the other people. If you know someone with better credit who is willing to take on the responsibility, getting a co-signer can help. Like when you go out a loana co-signer of a lease is legally agree pay your rent if you don’t. It provides the owner with a safety net in case you become as low a risk as they might fear..

Be careful and considerate when trying to convince someone to be your co-signer – life gets to you fast, and if you don’t pay your rent due to circumstances beyond your control, they’re going to hit the bill.

Another people-centric solution: Flatmates. If you know someone who needs an apartment and has better credit than you, they may be the main name on the lease. Keep in mind that they will be in a situation similar to that of a co-signer: if you ghost them on rent, they will have to pay your share.

Finally, if none of these options work, you can try offering referrals to your potential landlord. The best references will come from previous landlords singing your praises and noting how regularly you paid your rent. If you can show a new landlord that you’ve never missed a monthly payment in your entire life — and your previous landlords love you so much they’re willing to write a letter to that effect — they might be willing to ignore it. a disappointing credit score payment.

Show paper trail

The reason a landlord is hesitant to rent to you is your credit score. But many people have good incomes and even savings despite bad credit – this score could be the result of identity theft, a few missed payments, or just some bad decisions you made years ago.

One way to overcome this is to show your landlord proof of your financial security: pHave stubs of your work (a note from your boss wouldn’t hurt either), bank statements, and paid utility bills. You’re basically trying to convince them that your credit score is just part of your financial history, so the longer the paper trail you can show them, the better.

Target rent by owner

Alternatively, you can search for apartments that do not require a credit check. This usually means looking for “rent by owner” apartments, which you’ll usually find in private homes. These will be basement apartments, mothers-in-law suites or similar individual units rented out to people looking for a little extra income. Platforms like Airbnb have reduced the number of these apartments on the market, but they still exist.

Although some of these apartments can be surprisingly pleasant, there are a few precautions to take:

  • Legality. One of the reasons a landlord might be willing to give up certain documents could be the legal status of the apartment. If it’s an illegal apartment, it may not pass a safety or health inspection, so you should do your due diligence before jumping on it.
  • Scams. These days, anything resembling a financial workaround is very maybe a scam. Predators know that people with poor credit are desperate to find apartments, so offering accommodation without a credit check is a great way to collect security deposits and then ghost you. Don’t be pressured into handing over money before you’ve really checked things out.

If none of these strategies work for you, there’s one last bet you can try: talk to your potential owner. Sometimes a conversation with another human being is enough to overcome an obstacle. There is no guarantee, but if you explain your situation and ask a potential owner for some help, simple human decency strength jump in and save yourself.

James V. Hayes