Searching for a new (or first) apartment can be a very trying task. If you are strapped for cash it can be an expressive process. But even if money is not an issue it may take time to find an apartment that meets all of your requirements. Some people place the price as top priority. Others believe location is king. [Read: House Shopping by Location Can Save You Time and Money]
But whatever you may want in an apartment will not make a difference if you have a poor credit score. Landlords and apartment complexes look at your credit as a sign of trust that you will pay your rent, each month and on time. Having bad credit may severely limit your options, or you may just have to go through more hoops.
People fall into bad credit for a variety of reasons. But regardless of what happened in the past, there are ways for you to redeem your subsequent low scores (as long as whatever happened is in the past).
Here are seven other ways you can indicate your trustworthiness.
- Figure out your scores beforehand. It is a good idea to know where you stand credit-wise before you apply to any apartments. This will allow you to give yourself and the apartment complex a heads up and to know what you are dealing with. Obtain a copy of your credit report and carefully look it over. If there are any mistakes get them resolved. If there are still unpaid debts, pay them. This will also allow you to put yourself in a better light by showing and explaining past discrepancies to the landlord.
- Honesty is the best policy. If you are aware that your credit is much lower than average, the worst thing you can do is to avoid telling the leasing office. Regardless of what you say or do not say, they will figure it out. So it is better to just get it out in the open from the start. Bad credit is not the end of the world and it is not even uncommon, so chances are the landlord has already had to deal with similar circumstances. Being open and honest about your faults is an attractive quality, and the landlord will likely be more open to working with you.
- Provide copies of your scores. When landlords and apartment complexes check into your credit score it is called a “hard inquiry”. Oftentimes these checks can negatively affect your credit by reducing points from the overall score. To keep your credit score from potentially being depleted any further it would be a good idea to provide your own copies of your credit score. These can be obtained from MyFICO.com for about $20. Sure it costs a little money, but it will be worth it to keep your credit safe.
- Show them the money. Along with being honest and providing your credit score, you can also help put your landlord’s mind at ease by bringing in various proofs of income. Tax returns, pay stubs, and letters from your employer all indicate that you are making consistent revenue each month. And if the cost of rent is 30% or less of your income (the national standard of accepted affordability), it will be obvious to your landlord that you earn enough to make the payments.
- Present letters of recommendation. I mentioned a letter from your employer in the last paragraph. Beyond showing you make a sufficient amount of money, such a letter can also provide proof that you have kept a steady job and there are no signs of you leaving. It would probably be a good idea to get a letter of recommendation from your previous landlord (if you have one), which would indicate you have no problem paying rent in a timely manner every month. You can even go so far as to get letters from other places where you have a payment track record, such as a gym, cable company, utility company, insurance company, etc.
- Offer more money up front. Even with all of your recommendation letters and good intent, the apartment company might still have some qualms about leasing you a room. Another way to put their mind at ease is to offer more cash up front. You can do this in two ways. One is by simply paying a larger security deposit then they usually require. Another is by agreeing to pay a few months’ rent in advance. Both methods show that you have enough money and are more than willing to prove it.
- Agree to automatic payments. Another way you can indicate good faith on your part is by agreeing to pay rent via automatic payments. Many landlords, especially ones operating outside of big apartment complexes, will feel more reassured if rent money is being deducted automatically each month and going straight into their bank account. This proves you are confident in your ability to pay on time. Just know that if something happens and you don’t have the funds one month, the landlords will still get their money and this might put you in a tough situation financially.
These are all great ways to secure an apartment even if you have a poor credit score. However, just understand that they might not work in every situation. Some places, especially big corporate apartment complexes, have strict policies on requirements such as credit and they may not be willing to work with you.
In this case you will have to lower your expectations on what you were hoping for in an apartment. You might not be able to live in the neighborhood you wanted to, but with bad credit finding a place period is your top priority. If worse comes to worse, there are some smaller locations that might not require a credit check at all. Obviously there are chances that the clientele may be unsavory in such settings. But if you do enough searching you may be pleasantly surprised.
If you have bad credit than you just have to stay positive. You might have a harder time finding an apartment, but there is a place out there for you. And regardless of where you are in the process it is a good idea to start thinking about raising your credit rating. There are many different means of improving your scores, and I suggest looking into them so you can benefit from it later on. [Read: 8 Steps to Improving Your Credit Score]