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Most apartment rental postings state that a credit check is required, but you might be wondering what credit score you’ll need to get approved.
The average credit score of renters in the United States is 638, according to a 2020 survey by RENTCafe. However, depending on the rental market, the exact score you’ll need to acquire by rental will. In a competitive rental market, a higher score may be required than in a more relaxed market.
Poor scores range from 300 to 574.
575 – 659 (below average)
660 – 712 (Fair)
713-740 is a good score.
Borrowell members in Canada have an average credit score of around 660. In general, you’ll have a good chance of getting a rental if your credit score is 660 or higher. There are still things you can do to establish yourself as a desirable tenant if your credit score is below average.
We’ll look at how you can improve your rental application, even if your credit score is low, in the sections below. We’ll also go over what landlords look for when they run your credit report and how you may improve your credit score before applying for a rental.
With a bad credit score, how can I rent an apartment?
A low credit score does not always rule out the possibility of renting an apartment. Landlords are more concerned with finding a tenant they can trust to pay the rent on time and respect the property than with a specific credit score.
While a higher credit score may help you stand out, the most important thing is to portray a clear picture of the type of renter you are. Anything you can do to demonstrate that you will look after the property and pay your bills on time will help you.
Use the tactics below to strengthen your application and demonstrate that you’ll be a dependable renter. One or more of these strategies may be enough to persuade a landlord that you are a qualified renter.
Provide your rent payment receipts to the prospective landlord
While your credit score may be a source of concern for your landlord, solid documentation of on-time payments is certain to instill trust. Demonstrating a track record of timely rent payments may persuade a landlord to overlook a poor credit score.
Get a letter of recommendation from a prior landlord
A common feature of any rental application is landlord references. A fantastic recommendation from your previous landlord can persuade your potential landlord that you are a reliable renter. In some cases, this may make you more appealing than a potential tenant with a higher credit score but no references.
Make sure you have a guarantor on your lease
For renters with bad credit or limited credit history, lease guarantors are popular. A lease guarantor is someone who signs the lease with you and has a solid credit rating. Requesting a guarantor from a friend or family member could help you acquire a rental even if your credit score is low. Remember that if you don’t pay your rent, your guarantor will be held liable, therefore it’s critical that you keep your half of the bargain.
Please provide bank statements to prove your savings
If you present proof of financial solvency, a landlord may overlook a poor credit score. When combined with other positive factors like a good letter of reference and proof of work, showing a prospective landlord a bank statement demonstrating that you have at least a few months’ worths of living expenses saved could be enough to get a rental.
Offer to pay for several months’ rent in advance
You might be able to work out a deal with a possible landlord to get around your poor credit score in some cases. Offering to pay several months in advance may be enough to persuade a landlord to overlook your credit score; if you can also provide outstanding references and proof of savings and job, that’s even better! If the landlord is employed by a property management business, there may be less room for bargaining than if the landlord is self-employed and renting his or her own property.
Describe your personal situation
Your credit score does not define you, and there are numerous causes for a low credit score that has nothing to do with your ability to make timely rent payments. If at all feasible, explain your particular situation to the landlord. Landlords are people, too, and with any luck, you’ll be able to locate someone who will help you out. The landlord could be willing to take a risk on you if you can show how you’re striving to improve your credit (particularly any actions you’ve already done).
Avoid “no credit check apartments”: You may come across postings that say they don’t require credit checks throughout your apartment search. While this may appear enticing, it’s still advisable to stay away from these rentals. Because the property managers of these flats know that its potential tenants are likely desperate for a place to live, they may not bother to keep the units in good repair (or at all). Furthermore, if you pay your rent late, the late fines are likely to be excessive, putting unnecessary strain on your finances.
Use the techniques above to assist position yourself advantageously for a prospective landlord before turning to one of these rentals. It can be a little more challenging to find a rental when you have a low credit score, but it’s not impossible, especially if you’re willing to put extra effort into your application.
Why Do Landlords Check Your Credit?
Landlords are looking for tenants who are most likely to pay their rent on time and respect the property. Landlords check your credit to evaluate your likelihood to pay rent on time.
When there are many promising candidates in the mix, a landlord will likely prioritize those with higher credit scores, as they indicate a more stable financial situation.
What do landlords look for On a credit check?
A landlord will look at your credit report to see if you can and will pay your rent on time. Your credit score is only one factor to consider when determining your creditworthiness. The following components of your credit report will be evaluated by your landlord in conjunction with the remainder of your application.
Your debt-to-income ratio is as follows: You’re probably living beyond your means if you have a modest salary and a lot of debt. In this case, a landlord could be hesitant to rent to you. Landlords prefer to see that you earn three or four times the rent amount.
Outstanding debt: Any outstanding debt you have will be noted by your landlord. Not only is the amount of debt important, but so is the type of debt. Someone with a lot of credit card debt, for example, may appear less trustworthy than someone with the same amount of debt spread out over college and auto loans.
Your credit card payment history: Landlords want to know that you’ll pay your rent on time, so they’ll look for indicators of late payments and accounts that have been charged-off or sent to collections.
Bankruptcies: If you have a history of bankruptcy on your credit report, it may be difficult to find a rental. A landlord may be able to overlook a bankruptcy if it occurred in the distant past and you can currently demonstrate financial soundness.
Credit reports are only part of the picture for landlords. If your application has many other favorable qualities, such as a positive reference from a former landlord, a landlord may be willing to ignore bad blemishes on your credit record.
The Bottom Line
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