How To Rent an Apartment If You Have a Low Credit Score

By: ROS Team

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Having a credit score below 600 is not ideal, but it’s not the end of the world. You can still get an apartment with a low credit score.  But first, let’s look at why credit scores are such a big deal.

The Importance of Credit Scores

Renting property is about making money. There is a risk of losing money if tenants are late or don’t pay rent. To better weigh the risk, landlords and property managers screen potential tenants by checking their credit scores. Credit scores are a good indication of one’s financial history and financial responsibility. Renting an apartment to someone with a low credit score involves a bigger risk than renting to someone with a high credit score.

Importance of Credit Scores

What Does a Low Credit Score Mean?

Credit scores range between 300 to 850.  A score below 579 is considered low. Statistics suggest people who have a low credit score tend to be delinquent on their other financial responsibilities. Possible repercussions of having a low credit score include not being approved for an apartment or being ineligible to even submit a rental application. Landlords receive dozens of rental applications from potential tenants who have much higher scores–why would they take on additional risk by renting to someone with a riskier credit history?

Having said all that, having a low credit score does not automatically mean that renting an apartment will be impossible. Getting an apartment is still possible because not all landlords are not focused solely on your credit score numbers. Some are more interested in the reason your score is low in the first place.

If the reason is that you made late payments or have outstanding bills on your credit report, you might not be in a good position to rent an apartment. A low score indicates to landlords that you may not pay rent on time. But if you experienced financial challenges in the past which impacted your score, or if outstanding student loans or credit card debt is to blame but you have a current history of paying the bills on time, your low credit score may not be as big a problem.

Low Credit Score

I have a low credit score but need an apartment. What are my options?

1- Be Proactive

Do what you can to make your rental application stand out in a good way. Be proactive and provide all the necessary documents and/or information with your rental application.

This usually includes the following:

  • Verification of employment letter
  • Paystubs
  • Tax returns
  • Bank statements
  • Reference letters
  • Photo ID
  • Certified check
  • List of previous addresses
  • Banking information

Write a cover letter that gives the landlord a brief introduction about you and the reasons why you are looking for an apartment. A cover letter is the best way to explain why you have a low credit score and what you are doing to improve it. It will also help convince your potential landlord that you won’t miss any rent payments as a tenant.

Additionally, when you get a chance to inspect the property, it would be great to strike up an honest conversation with the landlord. Try to cultivate a personal relationship and build rapport. Explain and also provide some context as to what led to your low credit score.

2- Get a Co Signer

If you can find someone with a good credit score to co-sign a lease with you, do it!  People with no credit history or lower scores find that having a co-signer is a viable option. However, be mindful that the one who co-signs the lease with you will be just as responsible for any outstanding fees and expenses as you are. Make sure you let them know that before they co-sign.

Get a Co-Signer

3- Bring Multiple References

If you are not new to renting, you may know some people who can vouch for you as a tenant or as a person overall. Your future landlord may ignore certain facts, but the words of previous landlords carry a lot of weight.

If you have cultivated a good relationship with them, the words of your previous landlord can be gold. However, if you don’t have rental history, you can provide a reference letter from your boss or a mentor. Remember to make sure that you choose someone who has something nice to say about you.

4- Make an Offer

Money talks, so consider using it to your advantage. Offer to pay a larger security deposit amount or two months’ rent in advance. This will show that you can afford the rent and that you are serious about renting that apartment.

Final Takeaway

As you can see, there are quite a few ways to get an apartment despite having a  low credit score. Having said all that, don’t take your credit score slightly, and if you can improve it before starting your apartment hunt, please do so.