Passing a Rental Credit Check
Review your current credit score and full credit report. It can help to know the credit score you’re working with before applying to lease a property. To do this, you could check your credit card statement or use a credit score service. If you have a lower score (under 650), figure out what’s contributing to that so you can make a plan to fix it (and explain that plan to landlords). Most major credit card companies provide credit scores to their customers, so if you have a credit card, try checking your monthly statement or online account. You can also request a free copy of your credit report from each of the 3 major credit reporting agencies (Experian, Equifax, and Transunion) on AnnualCreditReport.com. Low credit scores might still be accepted by a landlord, but it’s often best to talk to them about it before applying to a property for the best chance of getting approved.
Improve your credit score, if necessary. Whether your credit score is low or already in the acceptable range, it’s never a bad idea to build on your credit score to make yourself a more appealing prospective tenant (and boost your chances of passing credit checks). You can improve your credit score by: Paying all bills on time. When you have a consistent payment history, prospective landlords can see your track record of responsible, on-time payments—meaning you’re more likely to pay rent on time at their property, too. Catching up on past-due accounts. If you have any debts, work on paying them off, starting with accounts that are already past due—including credit card debt and debt to previous landlords. Applying for new accounts only as needed. When you fill out a credit application, it’ll usually lead to that company adding a hard inquiry to your credit report. Multiple hard inquiries can lower your credit score, so try not to apply more than once every 6 months. Disputing credit report errors. It’s also important to look at your credit report so you can catch any errors that might be bringing down your score. If you spot any, dispute them; it’s a quick way to boost your credit score.
Gather all necessary documentation before applying for the property. Since you now know to expect a credit and background check, take the time to prepare! Landlords tend to request documents such as paycheck stubs, proof of income, and tax returns from the last year, so make sure you have all those documents on hand before filling out an application. If you can’t authorize a credit report (because you haven't started building your score yet or don't have any open accounts to report on), provide other ways to verify your information. Monthly bill statements, bank statements, and pay stubs all work well for this. Wondering when you’ll hear back about a rental application? Most take 1 to 3 days to process, although, in high-turnaround rental markets, your application might take less than a day to process. If it’s taking a property manager or landlord a long time to review your application, try contacting them to see whether there are any issues you aren’t aware of.
How to Rent Property with a Low Credit Score
Offer to make an advance payment on the rent. A bad credit score might make landlords think you’ll have trouble paying rent on time. When you offer to pay extra rent upfront, it takes away some of that risk by guaranteeing a certain amount of income for the landlord while also showing them you’re responsible enough to save large amounts of money. Usually, the more you offer to pay, the better your chances of getting approved are. However, definitely don’t pay more than you can handle. If nothing else, 2 or 3 months of advance rent payments is generally acceptable.
Get a co-signer with a good credit score. Co-signers who put their name on your lease basically guarantee that they’ll pay the landlord if you can’t. So, if you have a co-signer with a good credit score, a prospective landlord might be more comfortable letting you rent their property even when you have a low credit score. Co-signers can be anyone—a parent, family member, or friend, for example. Ask someone you trust, and be sure to explain what they’d be co-signing for and how you plan to make consistent rent payments (so, ideally, they’ll never have to step in and pay for you).
Show substantial proof of current income. If a prospective landlord can see you make more than enough money to pay their monthly rent, they might decide to let you rent their property even if you have a low credit score. Provide bank statements, pay stubs, proof of your current savings, and employment letters to verify that you’re making money and can afford to pay rent.
Give the potential landlord an explanation of your low credit score. There are many reasons why you might have a low credit score, and helping a prospective landlord understand your situation can prevent them from jumping to conclusions and rejecting you based only on what they see in the credit report. Explain the factors that might be contributing to the score, as well as your plans to live more responsibly in the future. For example, you might have lost your job and missed several payments before you could find a new one. If you explain that to a landlord and prove that you have a new job, they might feel better about approving your application. If you have a history of eviction, that’s often a red flag to landlords, too—but, once again, explaining your situation can help. Tell them why you were evicted and what steps you’ve taken to avoid that in the future. At the end of the day, you might not get your dream apartment with a low credit score or eviction history—but many landlords could still be willing to rent to you.
Find a roommate with a good credit score to live with you. Since the roommate’s name would be on the lease in addition to yours (making them responsible for rent as well as you), a landlord might think it’s less of a risk to rent to both of you. Try rooming with a friend who’s looking for a new place—or, if that doesn’t work, there are plenty of ways to find good roommates online. Websites like RoomieMatch and Padmapper can help you find a roommate.
Ask your previous landlords for references. A former landlord might be willing to talk to your prospective landlord about what a good tenant you were (and your reliability in making rent payments). With a reference, a prospective landlord might be willing to overlook a low credit score. Only do this if you have a good rental history and know you’d get a positive reference! If you do this, keep in mind that prospective landlords will most likely ask about your rent payments, behavior (whether you were respectful to the other tenants), and whether you left the unit in good condition.
Rent month-to-month instead of signing a long-term lease. When you’re renting month-to-month (meaning the lease renews each month), landlords often see low credit scores as less of a risk since they can more easily give you 30 days’ notice if you don’t pay rent for some reason. So, if you have a low credit score, consider opting for a month-to-month lease. There are generally 4 types of rental agreement: month-to-month, short-term, long-term, and rent-to-own. Short-term lease agreements usually last between 3 to 6 months, while long-term lease agreements last from 12 to 15 months (or more). Rent-to-own lease agreements allow tenants to rent the property for a certain amount of time before buying it entirely.
What is a rental credit check?
Credit checks allow landlords to look at a potential tenant’s credit habits. When a landlord or property manager is figuring out whether to lease their property to someone, they run a credit check on that person. Since renting is usually an ongoing, monthly obligation, landlords want to find concrete information that tells whether the prospective tenant can pay rent on time. Credit checks examine: Credit score Credit usage Payment and employment history (including whether you’ve missed any payments) Social Security number verification Fraud indicators and credit bureau analysis on the factors affecting your credit score Account summaries Tradelines (accounts on your credit report, including loans and collections)
Landlords look to determine whether tenants meet their rental criteria. They look for positive signs like consistent, timely payments, low debt-to-income ratios (meaning you have more income than debt), and no past-due accounts to decide if they want to rent their property to a tenant. They also look for negative signs that indicate they shouldn’t rent a property, including: Late payments. If you have repeated late payments on rent, credit loans, utility bills, or any other kind of account, this may make landlords worry that you won’t pay rent on time. Large debt load. If you have a substantial amount of debt, this might impede your ability to pay rent. However, most landlords also consider what kind of debt you have. For example, student loans are considered responsible debt and more acceptable, whereas large amounts of credit card debt might indicate irresponsibility. Delinquent accounts. If you owe a significant amount of money to a former landlord and they reported your payment history (and past-due bills) to a credit bureau, it’d show up on your credit report.
What credit score is needed to rent an apartment?
Many landlords look for a minimum credit score of at least 600. However, there’s actually no set “minimum.” Requirements tend to vary by location; some landlords might accept a score lower than 600, while some (usually for more high-end properties) might look for something higher. Still, it might help to keep 600 in mind as a general minimum. A score of 670 and up is considered “good,” so you might consider making that your credit score goal if your score isn’t already that high. Any score below 600 is considered bad credit, but that doesn’t mean you can’t still rent property. If you’re wondering whether it’s possible to pass a rental check with a score below 500, the answer is yes. Just keep in mind that you’ll likely need to explain the circumstances of that score (with proof of income, a co-signer, or a month-to-month lease).
How long does raising your credit score take?
It can take months or years to raise a credit score, but there's no set time. Ultimately, it comes down to the reasons your score is low, and it usually takes time to rebuild a low score—there aren’t many ways to do it “quickly.” There isn't a definite timeline for how fast a credit score will improve! The only real quick fix is if your score is low because of an error (in which case, you can dispute the mistake, and it’ll go away). For example, if your credit score is low because you missed multiple payments on a credit account, your credit score will start going up once you pay the money you owe and start making regular monthly payments after. So, depending on your current finances, it might take weeks or months to see an improvement in your credit score.
Tenant Red Flags that Landlords Look For
Avoid the warning signs that might make landlords wary of a scam. Since the credit check process is intended to identify who might be a good tenant and who might not be, landlords use them to protect themselves from scams and fraud. If you’re looking to rent (especially with bad credit), remember that these signs will likely raise alarm bells with landlords: No landlord references. If a prospective tenant doesn’t have any past references, a landlord might think they have a bad rental history. However, this is also situational; for example, it’s normal for a recent college grad to have no references. One person on the lease but multiple occupants. If there’s only one adult on the lease but multiple adults living in a unit, a landlord might assume the adults who aren’t on the lease would have issues with a background or credit check. Cash payments. This isn’t always a problem; however, if an applicant only pays rent in cash (instead of checks or direct deposit), a landlord might think that they can’t open a bank account or have financial problems of some kind.
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