When it’s time to move, you may find the rental applications are lengthy and tedious to complete. These forms ask about income, pets, and your previous rental experiences, as well as more sensitive information like your credit history. While not all landlords look at a credit score when making a decision, enough of them do to make it a top priority for your next application.
But is your score too low? And do you even have a credit history to look at?
Read on to learn more about the different credit scores that could help you get the apartment of your dreams, and what to do if you need to improve your credit score first.
Why credit score matters for renters
Landlords often look at credit scores the same way lenders do, as an indication of how likely you are to pay your financial obligations. Your rent isn’t a loan to be paid back, but it is a significant commitment. Landlords need assurance that you won’t leave them on the hook for unpaid rent or the cost of any property damages you may cause.
To landlords, a lower credit score (or no credit score at all) could signal the renter isn’t financially trustworthy, making them reluctant to move forward with a rental application. Or, if a landlord does approve a renter with a lower credit score, they may require a large initial deposit, a co-signer, or additional proof of income.
It's also good to keep in mind that landlords for larger, corporate-run apartment complexes using property managers tend to look at credit scores more often than individuals with one or two rental properties. In fact, it’s possible to rent an apartment from a private landlord who doesn't require a credit score check at all.
General credit score requirements to rent an apartment
Just as there isn't one “right” credit score for a mortgage or car loan, there isn’t a one-size-fits-all minimum score for apartment rentals. However, the general rule is that a score of at least 600-650 may get you in the door (literally). Also, keep in mind that a higher score will likely improve your chances of scoring a rental, especially in competitive situations where the apartment is in high demand and you may be one of many applicants trying to get the same apartment.
To break the rental credit requirements down further:
- A FICO score of 670-739 is considered good and offers far more apartment opportunities than lower scores.
- A score of 740 or higher is very good/excellent and can help you get the best deals in the best residential areas.
Credit score expectations by rental type
The more corporate a landlord is, the more likely they are to require an apartment rental credit check, and their minimum credit score may be higher than the rest. The quality of the rental and the amenities offered, as well as the geographic location, also affect the minimum score requirements. However, generally speaking:
- Luxury apartments in high-demand areas may require 700+ credit scores, as well as larger deposits
- Standard or mid-range apartments (the most common) may require a score of 650-700
- Budget-friendly apartments from private landlords have the most flexible requirements, with a lower score of 600-650 possibly qualifying. (But scores lower than 638 may be concerning to some landlords in this category.)
- Low-income or subsidized apartments may not have a score requirement at all, or approve those with subprime scores of below 600 with other assurances (pay documentation)
What if you have a low or no credit score
If the credit score required for renting an apartment increases with the quality of the apartment, what can you do if your score is very low? There are some workarounds to show you are responsible and can handle the commitment of a monthly lease payment.
Also, renting with bad credit may take additional planning, as the application process can be longer. So don’t wait until the last minute to apply, especially if you have to be out of your old place in a hurry.
In general, here are some things you can do to improve your odds:
1. Offer a large security deposit upfront
Instead of just a first and last month’s rent deposit, ask if you can pay two or even three months’ rent upfront. While this will be a significant out-of-pocket expense, it provides the landlord with some extra assurance. (Just be aware of any state or local laws that limit the security deposit.)
2. Get a co-signer
Adding someone with good credit to your lease can be enough to get a “yes” from a landlord. Make sure they have a stable income and have agreed to share legal responsibility with you. They may not have to live with you (called a “guarantor” in this case), but will agree to step in if you default on your payments.
3. Show proof of income and employment
Sometimes, a higher-than-average income can sway a landlord. Show your pay stubs, tax returns, or a job offer with the income clearly stated. If you have sufficient income of two to three times the monthly rent, you increase your odds of approval. A much higher income can often overcome any credit concerns.
4. Demonstrate positive rental history
If you’ve rented before, provide documentation that you paid on time and left your apartment in good condition. Do this with a signed letter from your previous landlord and bank statements showing on-time payments and return of deposit. Reference letters can be a difference maker if the future landlord is unsure of your trustworthiness.
5. Target “no credit check” apartments
Some rentals will advertise openly that they don’t run a credit check, so applying for them is an easier way to avoid credit issues. Of course, this may also mean that they attract people with low or bad credit, and are likely not luxury apartments. If these factors don’t matter to you, start with these apartments from the get-go to avoid hassles from a credit check decline.
How to check and improve your credit before renting
The last thing you want is to be surprised by a poor credit score at the time you apply. Even if you don’t have the score you need, it helps to know about it ahead of time. This way, you can work on it before you apply for that next rental.
Start by checking your credit report for free from each of the three credit reporting agencies. You can access them weekly, look for any changes, and dispute information you think has been reported in error. While this won’t be the same as your credit score, it will show you any issues that can negatively affect your score and give you a chance to fix mistakes or work on problem credit accounts.
Sites like Experian do offer you a look at your credit score for free. You’ll need to sign up for their reporting service and opt out of the paid version. (Just know that each time you log in to see your score, you’ll be prompted to sign up for the optional paid service.) This score will be very close to the score a landlord would see during an application, giving you a chance to address issues and possibly raise your score before you apply.
Don’t like what you see? Your score can be improved. Here are some tips for raising credit scores:
- Make payments on time. Don’t ever skip a payment to a service provider, credit card company, bank, or vendor. If you have trouble meeting your monthly financial obligations, reach out to a biller and ask for more time. Paying late can have an immediate negative effect on your score, as it accounts for 35% of your credit score.
- Pay down debt. The more you owe on your existing credit cards and loan accounts, the higher your utilization rate. Ideally, you want to owe less than 30% of the amount available to you. Paying off credit cards and loan balances can boost your score and help you secure the ideal apartment for you.
- Avoid taking on new credit. Each application (and approval) can temporarily drop your score, which is something you want to avoid in the weeks leading up to an apartment application. If possible, wait until you’ve secured your new space to apply for necessary credit lines.
- Ask for reporting. If you’ve paid phone bills or apartment rental fees previously, see if those companies can report your on-time payments to the three credit reporting agencies. They may only be able to do so moving forward, but these additional details on your credit report can be the difference-maker for an ideal credit score.
A better credit score now can create big gains later
Filling out the rental application is just one step of many for getting into a new apartment, and it pays to understand how the process works. In fact, you might consider calling a potential landlord ahead of time to ask about what’s required before you ever tour the new place.
Knowing what landlords look for can save you time and frustration during your apartment search. One of the qualifications — a good credit score — may require you to do a little extra work. However, the payoff is access to a quality apartment as well as opportunities for future loans and mortgages. Putting in the work for a place to stay now can only improve your long-term financial prospects.
