There’s a growing concern over a large number of people with bad credit or even a lack of credit scores. According to statistics, only 20% of American consumers have an exceptional score of 800 and above. The majority have either poor or no credit. Such people face many challenges when applying for loans or seeking approvals that require a good score.
Those looking for houses to rent are not left out either. Landlords now require that one meet the minimum credit score requirement before they are accepted as tenants. What about those with high income but bad credit scores? Here’s how to rent your dream house if you find yourself in that category.
Show Your High Income
Prove your worth using your recent pay stubs and a huge sum in savings. A good income that can impress a potential landlord should be about 40 times the monthly rent. For instance, if the rent is $1,500 per month, ensure you earn at least $60, 000 per year.
However, keep in mind that this may only work with private landlords. Property managers may be hesitant to make decisions based on your high salary. In that case, consider getting a recommendation letter from your previous landlord. Let them talk about your reliability in the letter.
Agree to Pay Several Months Upfront
If you can manage to convince the potential landlord that, indeed, you have a huge paycheck, it’s now time to walk the talk. Instead of paying the typical first-month rent and the security deposit, offer to pay three or four months in advance.
The more months you can pay ahead, the better. With a high income, you can even offer to pay for the entire lease term at once. No landlord will turn down such an offer. They may not even bother to dig further into your credit score reports. Just remember to initiate the conversation first. Here, it’s about using money to rectify your past mistakes.
Start Settling Your Debts
A good credit score offers many benefits beyond quick and easy acceptance as a tenant. You’ll get fast loan approvals and enjoy low-interest rates on loans. If you have a high income, it’s an excellent opportunity to improve your score by settling all your pending debts.
Start paying down your credit card debts and other loans you still owe a balance. You can then use that financial report to show that you’re working towards improving your score. This way, the potential landlord will see you as a responsible tenant and even overlook your current credit score.
Show Your Stellar Rental History
Landlords are interested in your rental history report, especially if you’re trying to rent with a bad credit score. You can show commitment and preparedness by bringing your previous payment receipts and a reference letter from your former landlord or landlords.
An excellent rental history report is a great way to counteract your bad credit score, especially if your former landlords can demonstrate your good relationships with them in the reference letter. Bring at least two rental history reports from different landlords if you’ve rented in more than one place.
I Have Bad Credit and Need to Rent a House, What Do I Do?
Everyone needs a place to call home. Some choose to buy one while others prefer renting. According to a 2020/2021 Statista Global Consumer Survey report, Switzerland and Germany had more than 60% of their population living in rented houses.
Another report shows that 53% of Americans are turned down due to a bad credit score. This is bad news to the group who prefer renting to owning a home. And while not all landlords will scrutinize your credit history before letting you in as a tenant, others will. Regardless, there’s always a solution for each situation. Here are tips on how to rent a house to rent even with bad credit.
Talk Honestly about Your Bad Credit
Talk about your bad credit before the potential landlord or the letting agents find out by themselves. You can draft a detailed letter explaining your bad credit and what you’re doing about it. This way, you can appear as a trustworthy and responsible client. Unfortunately, this may not work with bigger management companies.
Offer to Pay More Upfront
Many landlords will require you to pay the rent for the first month and a security deposit before renting. Some landlords will be more willing to accept advance rent payments to negate future risks of missed rent remittance. Offer to pay two to three months ahead plus the advance security deposit. You can even pay more if you’re in a position. Make the payment in cash if possible. Cash payments tend to be more attractive than bank deposits. Ensure you continue with timely payments on every due date.
Find a Private Landlord
Letting agents will subject you to a thorough credit background check. To evade that, you can approach private landlords directly if you have a questionable credit score. Credit checks can be costly and time-consuming. Private landlords tend to bypass these processes, but they’ll still need to know about your rental history or income status. You can always ask friends, family, or employers for a recommendation.
Agree to Set up an Automatic Rent Payment
Most landlords prefer receiving rent payments on autopay. But before that, you can showcase proof of your earnings plus savings to the landlord to stamp your trustworthiness and ability to pay. You can then offer to have rent automatically transferred to the landlord’s account each month. Automatic House Clearing (AHC) is a safe electronic money transfer system agencies use to receive money in their accounts. An automatic remittance reassures the landlord that they’ll always receive rent payment on time.
Use a Cosigner
Consider getting a co-signer if your attempts to convince the potential landlord about your bad credit fail. The co-signer should be someone with good credit. The landlord will always ask the co-signer to pay your rent if you default. This is a good arrangement for those with a higher paycheck but still, have bad credit. Choose a trustworthy person to co-sign for you. Your best choices could be a close family member such as a sibling or parent.
What’s the Minimum Credit Score to Rent Apartment?
Landlords and property managers are more concerned about potential renters’ credit scores than before. This is due to the rising number of people with bad credit scores. According to one report, 22% of U.S consumers do not have a FICO credit score. About 11% have less than 550 FICO scores.
Fortunately, there is no cutoff to what qualifies as a minimum or maximum credit score for renting an apartment. Each landlord is unique. Even those with poor credit scores will always have a solution when looking for a place to rent. Generally, the lowest credit score is about 300, whereas an exceptional credit score is 850. The minimum for renting an apartment falls somewhere between 600 and 700. That figure can be higher or lower based on the rental market competitiveness.
What’s the Lowest Credit Score to Rent a House?
Typically, many landlords will allow approximately 650 as the minimum credit score for renting a house. However, you may need a higher income and credit score when looking to rent in a highly competitive market. Therefore, it’s essential to calculate the amount you qualify for before applying for a rental house. But first, ensure to check with a credit reporting agency your potential landlord is likely to pull your score. Agencies vary, and landlords can choose any agency to get the credit score report.
What Credit Score is Needed to Rent an Apartment in 2022?
There is no universally acceptable credit score for renting an apartment in 2022. Landlords and property managers will accept a good credit score—570 to 739. A good credit score may vary based on location or property owner. Here is a general guideline on credit score rating.
- Poor: 300-579
- Fair: 580-669
- Good: 570-739
- Very good: 740-799
- Exceptional: 800-850
Always check the variables before applying for an apartment. What’s acceptable as a good score in one location may be considered too low in big cities with high house demand.
Can I Rent an Apartment With a 600 Credit Score?
People with below the minimum credit score face many challenges when looking for an apartment to rent. A credit score of 600 or less will significantly limit your options as many landlords perceive you as a high-risk defaulter. Still, it’s possible to find apartments that accept that score.
For instance, you can take time to check “no credit check” apartment listings within your area. It can be a tiring process that involves calling multiple apartments to inquire about their credit requirements. Small or privately owned apartments are other great options to explore.
Can I Rent an Apartment with Bad Credit?
Renting an apartment with a bad credit score or no credit is difficult yet possible. It takes extra effort and strategy before any landlord or property manager can accept you as a tenant. Here are some steps you can take when looking to rent an apartment with bad credit. .
- Offer to pay a higher deposit fee
- Approach the property owner instead of the property managers
- Get a co-signer
- Talk about your bad credit score and what you’re doing to improve it
- Inquire about “no credit check” apartments
- Offer to share a room with someone with a good credit score
- Offer to pay several months ahead
- Show proof of a hefty income and offer to set up an automatic rent deduction from your account
Can You Get An Apartment Without a Job?
Landlords are now looking into many details about a potential tenant before letting them in. From rental history, credit score, and other background checks, getting an apartment to rent can be tricky if you don’t meet various requirements.
Hunting for an apartment without a job or a steady source of income can even be more challenging. But that’s not all. Even those with stable jobs and high incomes face challenges when looking for an apartment. Theirs could be due to bad credit or even a poor rental history. Regardless of the situation, there’s always a solution for each case. In this post, we’ll discuss ways anyone can use to get an apartment without a job.
- Sublet instead of renting outright: Landlords may not care much about your credit score or income status as a subletter. Your rent payment passes through the original lessee whose name appears in the tenancy contract. Subletting also offers many benefits, such as subsidized payments, making the arrangement ideal for someone without a job or a steady income.
- Offer to pay more upfront: Instead of paying the first month’s rent and security deposit as most landlords require, offer to pay several months ahead. Better still, you can offer to pay the whole amount for the lease term if you have good savings. Unfortunately, some states have laws preventing landlords from receiving more than the first month’s rent and security deposit.
- Ask your former landlords to act as your referees: If you enjoyed a good relationship with your previous landlords, ask them to draft for you a reference letter and include it in your rental application. It can be more than one if you previously rented in multiple places. Let them talk of your responsibility and punctuality in rent payment.
- Show off your good credit score: Landlords are quick to turn to your credit score report before handing you their door keys. If you have an excellent credit score, include it in your rental application instead of waiting for the landlord to ask for it. The landlord may decide to overlook the fact that you don’t have a job if your credit score exceeds 700.
How to Get an Apartment Without a Job as a Student
Getting an apartment for a college student without a job can be trickier, especially if you pay all bills by yourself. You’re likely still struggling to build your credit score. Others lack a credit score at all, which complicates the equation further. Here are some hacks you can use to get an apartment if you find yourself in that situation.
Get a co-signer
A co-signer should be a reliable person you can trust. As a student, your parent or guardian is your best bet. They’ll be responsible for your rent payments or damages caused to the property if you don’t pay.
Look for a Private landlord
Private landlords have more flexible requirements. Some may not even ask for your credit report or whether you have a job or a regular income. Do research in your area and apply for apartments that are privately managed.
Find a Roommate
If you lack someone to co-sign on your lease or enough money in your savings account to pay the rent yourself, then splitting the cost is an option. Many students operate on a shoestring budget and are willing to find a roommate to share the rent. You can search on social media or ask your friends about people looking for a roommate. Just ensure your roommate is a reliable person with a good credit score.
Can You Get an Apartment Without Credit?
Landlords will typically require a credit report with an impressive credit score before allowing you to rent an apartment. A credit report is a detailed record of your credit history and current credit activity. It shows potential landlords how you’ve managed debt in the past and if there are any red flags like overdue payments. Having no credit means you’ve never taken out a credit card or loan so you have no credit history. Can you get an apartment without credit? The short answer is yes and here’s how to do it:
Provide Proof of Income with References
A bank statement that shows a regular flow of income will prove to the landlord that you won’t delay or miss your rent payments. The statement should be official with the name and address of the bank. It should bear a date and stamp or signature of an authorized officer with your name and total bank balance. Professional reference letters from your employer or college professor will boost your credibility even further. Even better if it’s from a former landlord.
Pay a Security Deposit or Offer to Move in Immediately
Each month that goes by without a tenant means that the landlord incurs utility costs and loses income. Offer to pay a couple of months upfront as a security deposit which you can get back after your lease is up. This way the landlord will be assured that the risk of non-payment is reduced. Alternatively, offer to move into the apartment immediately and pay on a month-to-month basis.
Rent a Privately Owned Apartment
An individual who owns a small apartment block is more likely to be more lenient than a management company that runs a huge apartment complex. They will still ask you for proof of regular income but their requirements may be less stringent. Write them a compelling cover letter explaining why they should offer you an apartment without credit.
How to Get an Apartment without a Job
Whether you’re starting over in a new city or you’ve been recently laid off, there are various reasons to be apartment-hunting even without a source of income. It’s a tricky situation and while most renters will find it difficult to get an apartment without a job, it’s still possible.
Find a Guarantor
If you fail to pay the rent at some point, your guarantor/cosigner will be obligated to pay your outstanding dues. Ask a family member, friend, or former colleague. Your prospective landlord will need proof that the guarantor is financially fit. Ensure that you are honest with your guarantor about your finances so that there are no surprises.
Move in with Someone
Your cousin, old schoolmate, or former colleague may be happy to take you in for free (because they trust you) until you get a job. When you start earning money, you can then agree on what amount you will be paying towards rent. The great thing about this is that the landlord deals directly with your roommate and not you.
All hope is not lost when you’re looking for an apartment without credit. You can provide income proof, pay a security deposit, or rent from a private owner. And if you don’t have a job, find a guarantor or move in with a roommate. You’ll soon be back up on your feet paying your rent yourself.