It’s no secret that renting an apartment can be likened to applying for a loan. And that’s because apart from the rigorous screening process, prospective tenants will also be subjected to a credit check. In fact, this is usually the determining factor that keeps you from snagging that dream apartment. And oftentimes, people tend to fail in this area because they have a poor credit score.
So what credit score is needed to rent an apt and what can you do if you don’t have it? Read more as we are going to give you some tips to help you with your rental application and get the apartment that you want.
What Is The Minimum Credit Score You Need To Rent An Apartment?
A credit score is normally rated between 300 to 850, and this is the information that insurance companies, financial institutions, and even landlords or property managers check before accepting your application. And depending on the standards of the lender or insurer, your chances of getting approved usually rely on this detail.
For your credit score to be considered ‘excellent’, you must have at least 800 and above while 740 to 799 is considered ‘very good’, 670 to 739 as ‘good’, 580 to 669 as ‘fair’, and 580 and below is considered poor.
Now in terms of renting an apt, there isn’t any law that requires you to have a certain score to be accepted. In the same way, there are no rules that oblige property managers to set a minimum credit score for your application to be accepted. It all depends on the landlord’s discretion whether he will accept you as one of his tenants or not as some landlords may follow the credit score set by FICO while others may be more open to 600 or lower.
But just to be safe, it’s recommended to maintain a credit score of at least 620 to increase your chances of being accepted as a renter/tenant as they’ll have peace of mind knowing that you are going to pay on time based on your credit score.
And also remember, high end rental locations will usually require high credit scores while less competitive markets will likely accept potential tenants with low credit scores. But what are you going to do if your credit score is not enough for the type of apartment you’re planning to rent?
How To Rent An Apt If You Have A Low Credit Score?
If your credit score is more likely a disadvantage in securing your projected rental property, then here are some strategies you need to follow to prove to the landlord that you are a reliable renter:
- Show Proof Of Your Previous Rental Payments – If you have a poor credit score, then prove your potential as a renter that you can pay on time by showing at least 6 consecutive months of on-time rent payments (checks, bank statements, etc.).
- Secure A Letter Of Recommendation – Ask your former landlord to make a recommendation letter for you, stating your character as a tenant and your good nature of paying on time. And if you have never rented before, then ask your employer to create this letter to help you secure a rental apt.
- Have A Lease Guarantor Or Cosigner – You might need a lease guarantor or consigner in order to win the confidence of the property manager. Just make sure to disclose all the necessary financial information about your guarantor as the landlord will surely ask this during the screening process as they will also be held liable in case you won’t be able to pay on time.
- Offer Upfront Payment Options – You can also entice the landlord to accept your rental application by offering upfront payments like automatic monthly deduction to your bank account, PDC (post-dated check), or at least 3 months’ worth of rent in advance if possible to show your willingness to pay.
- Proof Of Savings – Your savings can be a proof that you are financially capable of paying despite having a low credit score. And showing this information will also give the landlord peace of mind knowing you have back up funds if in case your income will be insufficient to cover your monthly rent obligation.
Tips In Improving Your Credit Score
Building credit may take years, but here are some ways to improve your credit score quickly and boost your chances of obtaining your dream apt:
- Get A Credit Card – Apply for an entry-level credit card that doesn’t charge an annual fee. And we recommend you choose secured credit cards that are backed up by a deposit just in case you’re not eligible for most bank credit cards.
After securing your card, make sure to pay your monthly dues on time and don’t exceed beyond 30% of the available credit.
- Request The Bank To Increase Your Existing Credit Limit – Ask the bank if they can allow this to lower your credit usage and increase your credit score. Just make sure to keep your card utilization to the minimum as much as possible to ensure improving your credit score.
- Turn On Autopay – Enable autopay so your card will be automatically deducted to pay for your monthly bills. This is also important since on-time payments are very crucial to maintain a good, and even excellent credit score.
- Request Utilities Agencies To Regularly Report Your Payments – Though having updated payments with your utility bills doesn’t factor in to your credit history, you can still make use of this information by asking the utilities agencies to send a report of your on-time payments to major credit bureaus as this might help improve your credit score.
- Monitor Your Credit Report – And lastly, checking your credit report helps you to be aware of your progress as well as flag any errors that might keep you from having a decent credit score so you can avoid the mistakes as you move forward.