How to Rent an Apartment When Your Credit Is in the Toilet

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Photo: Ryan DeBerardinis (Shutterstock)

There was a time when renting an apartment involved walking around the place for a few minutes, deciding you wanted it, then signing a lease and handing over a security deposit. Those days came to an end when the concept of a credit score emerged in the late 1980s.

Initially designed to help financial institutions gauge lending risk, credit scores have metastasized into just about every aspect of our lives. A poor credit score (generally considered anything under 600-650—although in competitive rental markets, that number might be higher) will negatively impact your chances of getting not just a loan, but a job, and even a place to live.

This creates a grim feedback loop for those with poor credit: You can’t get a job or an apartment because you’ve got bad credit, and you can’t improve your credit because you can’t get a job or an apartment. If you find yourself struggling to land a decent rental because of poor financial decisions committed by Past You, don’t despair. It’s not easy, but there are still ways to get a decent apartment if your credit is not so hot.

Pay the poor tax

The old adage that it’s expensive to be poor applies in this situation, because one of the most effective ways to convince a landlord you’re a good risk despite a bad credit score is to offer them more money in the form of a higher security deposit. Some states limit landlords to a specific amount (generally 1–2 months’ rent), while some states allow for more—and some, like Colorado, have no limit at all. Whatever state you live in, you can allay your landlord’s fears by putting down more cash up front—and if you’re a responsible renter you’ll get that money back when you move out.

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If that isn’t enough, you can offer a few other things:

  • If you can, pay in advance in addition to your security deposit. Offering the landlord a few months’ rent up front will be very convincing.
  • Offer to set up automatic payments. A landlord’s concerns could be assuaged if they know they won’t have to sweat you for a check every month.

Cosigners, roommates, and references

Another strategy requires the help of other people. If you know someone with better credit who is willing to take on the responsibility, getting a cosigner can help. Just like when you take out a loan, a cosigner on a lease is legally agreeing to pay your rent if you fail to do so. It offers the landlord a safety net in case you turn out to be as poor a risk as they might fear.

Be careful and considerate when attempting to convince someone to be your cosigner—life comes at you fast, and if you default on your rent due to circumstances outside of your control, they’re going to get hit with the bill.

Another people-centric solution: roommates. If you know someone in need of an apartment who happens to have better credit than you, they can be the primary name on the lease. Keep in mind that they will be in a similar situation as a cosigner: If you ghost them on the rent, they’ll have to come up with your share.

Finally, if neither of those options works, you can try offering your potential landlord some references. The best references will be from former landlords singing your praises and noting how consistently you paid your rent. If you can show a new landlord that you’ve never missed a monthly payment in your entire life—and that your former landlords love you so much they’re willing to write a letter to that effect—they might be willing to overlook an underwhelming credit score.

Show the paper trail

The reason a landlord is reluctant to rent to you is your credit score. But plenty of folks have good incomes and even savings despite having bad credit—that score could be the result of identity theft, a few missed payments, or just some poor decisions you made years ago.

One way to overcome it is to show your landlord evidence of your financial security: pay stubs from your job (a note from your boss wouldn’t hurt, either), bank statements, and paid utility bills. You’re essentially trying to convince them that your credit score is only part of your financial story, so the longer the paper trail you can show them the better.

Target rent-by-owner

Alternatively, you can seek out apartments that don’t require a credit check. This generally means looking for “for rent by owner” apartments, which you’ll usually find in private homes. These will be basement apartments, mother-in-law-suites, or similar single units being rented by folks looking for a little extra income. Platforms like Airbnb have reduced the number of these apartments on the market, but they do still exist.

While some of these apartments can be surprisingly nice, there are a few cautions to consider:

  • Legality. One reason a landlord might be willing to forego some of the paperwork might be the apartment’s legal status. If it’s an illegal apartment, it might not pass a safety or health inspection, so you should do some due diligence before you jump on it.
  • Scams. These days anything that seems like a financial workaround is very possibly a scam. Predators know that folks with poor credit are desperate to find apartments, so offering no-credit-check housing is a great way to collect security deposits and then ghost you. Don’t allow yourself to be pressured into handing over money before you really check things out.

If none of these strategies works for you, there’s one last gambit you can try: Talk to your potential landlord. Sometimes a conversation with another human being is all that’s needed to get past an obstacle. There are no guarantees, but if you explain your circumstances and ask a potential landlord for a little help, simple human decency might kick in and save you.

  

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