Can You Get an Apartment With Bad Credit?
7 MIN READ
Published February 08, 2024 | Updated February 09, 2024
You’ll need a good credit score for many important milestones in life, including renting your own apartment. A healthy credit score shows landlords that you’re low-risk, reliable, and likely to pay rent on time.
Can I get an apartment with bad credit? While it can be challenging to qualify for a rental with bad credit, it isn’t impossible. Be prepared to provide supporting documents and good references, pay a higher security deposit, or apply with a cosigner. In this guide, we’ll explore some tips on renting an apartment when you have bad credit.
Can I Get an Apartment with Bad Credit?
Yes, you can get an apartment with bad credit, but it may involve using a few strategies to demonstrate that you’re financially reliable. Landlords prefer renting to tenants who pay on time. However, some landlords may be more lenient than others.
You may have to adjust your expectations about the kind of apartment you can rent, look for alternative rental options, and provide reference letters and proof of income, or apply with a cosigner to boost your chances of approval with a poor credit score.
What Credit Score Do You Need to Rent an Apartment?
A credit score of 600 is usually a good starting point for most landlords. Like lenders and banks, landlords will check your credit score to determine your tenant risk profile. The higher your FICO score, the lower the risk.
Property managers can also deny your application based on your credit score. However, your credit isn’t the only factor they consider. They’ll also consider other factors like your income, job stability, and more to determine your eligibility.
Why Bad Credit Impacts Your Ability to Rent
Landlords use background checks and credit checks to determine your ability to pay rent on time consistently. These are some of the most common tools used to protect landlords. When they check your credit report, landlords are particularly interested in things like late payments, evictions, collections, or bankruptcy.
Renting an apartment with bad credit can be difficult because many landlords are not willing to take on the risk of renting to a tenant who has experienced recent financial difficulty or a reduction in their cash flow, be it long-term or just temporary. If you have a large amount of outstanding debt or a recent history of late payments, it may be difficult to convince them that you’ll be able to pay rent on time.
5 Tips on How to Get an Apartment With Bad Credit
If you have poor credit or no credit history, you may be wondering, “Can I get an apartment with bad credit?” Here are a few ways to improve your chances of getting approved.
1. Find a Bad-Credit-Friendly Landlord Willing to Rent
Most property management companies and apartment complexes require a credit check. The best way to avoid this is by applying for an apartment for rent with no credit check from a private landlord.
You’ll usually have to provide documents that demonstrate income stability to individual landlords. To improve your chances of getting approval, only apply for apartments that are well within your budget. You may be able to find listings for rent by owner (FRBO) on Craigslist, Facebook Marketplace, and HotPad.
2. Find a Cosigner or Roommate
If you can’t qualify for a rental, ask a family member or friend with a good credit history to be a rental cosigner. It’s important to understand that a cosigner will be responsible for paying the rent if you fail to pay on time. Be sure to always pay your rent on time and in full to avoid damaging your personal relationship.
Another option is to have a roommate with good credit and financial history on the lease agreement to increase your odds of qualifying for an apartment. This is also a good way to keep your housing costs low and save money.
3.Look For Organizations and Programs That Can Help
If you’re wondering, “Can I get an apartment with bad credit if none of these options are available to me?” you may want to look into government or nonprofit housing programs. These programs are usually targeted at those with low incomes and usually don’t require a credit check.
Here are a few programs to consider:
- Housing choice voucher: The Section 8 housing choice voucher program can help you pay rent for private housing.
- Subsidized rental housing: With this program, the government pays apartment owners in exchange for reduced rents for tenants with low incomes.
- Public housing: You may be eligible for public housing in a government property, which doesn’t require a credit check.
4. Provide Relevant Documentation
It may be possible to get an apartment with a bad credit score if you’re able to demonstrate that you have a stable income that is adequate to cover the rent. We recommend that your rent shouldn’t be over 30% of your monthly after-tax income. For example, if your take-home pay is $3,000, you shouldn’t spend more than $1,000 on rent payments.
Provide documents that show you have a stable income, such as your pay stubs and income tax returns. You can also show your bank statements to show you have sufficient savings to cover several months of payments in your bank account.
Boost your application by providing reference letters from previous landlords or employers. These professional references are a good way to show that you’re a responsible person with a strong rental history.
5. Pay a Large Amount Upfront
A landlord will also be more likely to approve your application if you pay a large amount upfront. While most landlords ask for one month’s rent before you move in, we recommend offering two or three months’ rent upfront if you have a low credit score.
Make sure the payment is well-documented so you can account for it at the end of the lease and either apply it towards the last few months’ rental payments or get it back when your term ends.
Build Your Credit To Increase Your Chances of Getting an Apartment
While you can get an apartment with bad credit, it doesn’t hurt to improve your credit score if you aren’t planning to move right now. You can build credit through on-time utility payments, paying down debts, keeping your credit utilization ratio low, and using a credit builder loan to establish an on-time payment history.
Property owners prefer responsible tenants, so they may check your credit when you send in an application. If your credit score is low, there are other ways to boost your rental application, such as applying with a cosigner, providing letters of recommendation and proof of income, and paying a larger security deposit upfront.