You’ve probably heard the myth that if you never plan to take out a loan, you don’t need to worry about your credit. But that’s not always true for at least this one reason: renting an apartment.
Landlords often check your credit as part of your application for an apartment. What they’re looking for is a history of late payments, loan defaults, and even past evictions, which are typically a public record. Having any of these things show up in their search might be a deal-breaker for your new apartment.
For those with bad credit, don’t give up all hope during your apartment search. Here are alternate approaches for finding a new place to live when credit becomes a problem.
Find a cosigner
Finding a cosigner is the most common solution to your own credit problems, and it’s often going to be your best bet for solving bad credit issues. While you may be asked for a cosigner for reasons other than credit, many landlords are going to be more receptive to your application if you have a solid second person to join you on the lease.
Of course, you’ll have to find someone with decent credit that’s willing to share liability with you. For younger renters, parents are often an obvious choice. If that option isn’t available to you, try a friend that understands you’ll be responsible with making monthly rent payments and honoring your lease. Just be careful not to let things go bad, as cosigning can turn into an ugly situation much like lending or borrowing money from a friend.
Include solid recommendations
If your credit score doesn’t speak to your reliability as a tenant, hopefully you have past landlords or other references that can. Stay on good terms with the your current landlord as he’ll be your most relevant reference Having a personal relationship is best, but if that’s not possible, find someone that can vouch for your ability to pay rent on time every month as well as being a respectable tenant. If you mail your rent checks to a property management agency, see if they’re able to serve as your reference.
If you don’t have references related to past apartments, consider handing over other references that could be useful. This could be your boss at work or some other relationship where responsibility is valued.
Explain your credit past
If you know your credit is going to be checked, you may be better off being up-front before your landlord uncovers your ugly history.
Sometimes just being honest about the reasons for a poor credit past can help earn some sympathy from a landlord. If you encountered hardship that was at no fault of your own, maybe sharing your story will be enough to get the okay to sign a lease. Either way, you’ll need to do your best to convince a landlord that you’ve changed your irresponsible ways.
If your credit is seriously scrutinized, you probably won’t be able to hide anything, especially a past eviction, so just be open and honest when you have little to lose and much to gain.
Offer more money up front
Money talks, and it’s no different when it comes to renting an apartment. If you can, offer your potential landlord additional deposits up front to reassure him or her that you’ll be on time with the rent payments each month.
For example, maybe the landlord was originally only looking for first month’s rent and one month’s security to move in. But if they’re unimpressed by your poor credit, up the ante and say that you’re willing to go above what they originally requested. If you can provide the first month’s rent and a full month’s security plus last month’s rent, that gives the landlord an extra month’s payment as a cushion to feel more comfortable about renting to you.
Find landlords that don’t check credit
If you don’t have great credit, keep searching until you find a landlord that doesn’t check credit scores. I’ve lived in several places where the landlord simply hasn’t bothered to go through the trouble of checking your credit history, and others have told me the same based on their experiences.
If avoiding a credit check, you’ll almost certainly need to be more flexible with where you hope to move in if you want to avoid getting your credit pulled, but you just might get lucky if you look around enough. You may be better off working with landlords that manage their own properties, too. Many landlords that contract out management to companies or own large buildings in popular areas will run a credit check as well as demand large payments before move-in.
Repair your credit for next time around
If you have trouble finding an apartment due to your poor credit, make sure you won’t have to deal with the hassle again. This means working hard to repair your credit for the next time around. If you’ve signed a one year lease, you’ll have plenty of time to get to work on your credit. Make sure that you’re responsible going forward by making payments on time and avoiding taking on more debt. Take a look at your credit report to make sure there aren’t any mistakes you need to correct, too.