The standardization of background and credit checks present an unfair obstacle for those building (or rebuilding) their credit scores. But landlords will work with you if you can explain why your credit isn’t in tiptop shape and what you can do to make your application more desirable.
If you’re looking to make yourself more attractive as a prospective tenant, here are the six most important rules to renting an apartment without a great credit score:
Get a Letter from Your Current Landlord
Ask your current landlord for a letter of reference. If you don’t already keep a record of your apartment rental history, start now! Your rental history should contain your previous landlords’ contact information, and you should give each of them a call to request references for your prospective landlord. A letter of reference from previous landlords that speaks to the following can seriously bolster a low-credit (or no-credit) renter’s case:
- Your track record of paying rent on time
- Your respect for both the property and the neighborhood
- The length of time that you resided at each property
- Contact information so the landlord can be reached directly
Keep in mind, having poor credit does not mean you are, or will be, a poor tenant. With student debt reaching astronomical levels, there are many victims of less-than-perfect credit who are still responsible and trustworthy. Be honest with your landlord about the state of your credit score. If you had a momentary lapse of judgment in your finances, explain how you’ve matured and increased your financial literacy. You’ll have the best luck dealing with an individual rather than a rental company, as an individual landlord could be willing to walk back their own rental requirements if you’re able to provide proof of financial stability.
Provide a Letter from Your Employer
Renters with low credit may get a pass if they provide proof of job security. Landlords simply want their tenants to pay their rent timely and consistently, and a steady stream of income from a full-time job is proof of your capability to pay rent on time. Not all employers’ policies allow for providing such letters, however … but if you can get an employment verification letter, it should include your hire date, annual salary and history of promotions.
Pay a Larger Deposit
Typically, lessors look for the first month’s rent plus a security deposit up front. Any bad faith created by a dastardly credit score could be offset by a larger deposit, as it lessens the risk to the landlord. If you can afford it, offer to pay the security deposit plus 3-6 months of rent in advance. If you can’t swing 3-6 months of rent in advance, offer to pay a larger security deposit. Either way, paying more will show your landlord you have either deep cash reserves, a high income (landlords typically look for 40 times the monthly rent) or both.
Sign a Short- or Long-Term Lease
If a landlord is hesitant to sign a 12-month lease, ask if it is possible to negotiate a short-term lease until they’re confident in your ability to pay on time. While a short-term lease can function as a trial period of sorts for both you and the landlord, it can, however, mean paying more on a monthly basis, or having your rent increased after just a few short months. Alternatively, if you have poor credit but are able to prove financial stability, you could stand out among applicants by offering to sign a longer-term lease. Longer leases are attractive to landlords because it means saving money on advertising, staging and cleaning the unit whenever a tenant moves out, and it negates the risk of costly prolonged vacancies in between renters.
Offer Automatic Rent Payments
Low-credit renters can increase their chances by offering to set up a recurring monthly rent debit from their bank. With poor credit comes a general lack of faith in your ability to pay on time, but an automatic debit from a verified bank account can negate this perception. Landlords feel more comfortable renting to tenants with less-than-perfect credit if they know that payment is all but guaranteed. Of course, you will need to provide proof of income, as well as a healthy checking and savings account free of adverse marks, such as overdrafts.
Learn what landlords are looking for on your credit report in Renting with Poor Credit – Part II.