With Bad Credit You May be Unable to Rent an Apartment | One Smart Dollar (2024)

Many Rentals Check Credit Upon Application

Do you know what your credit score is? If you’re not planning to take out a loan any time soon, you probably aren’t too worried about it. This could leave you in a bit of a pickle if you have to shop around for a new apartment. Many rental agencies check your credit and will end up denying your application if you don’t meet their credit requirements.

In today’s world, credit isn’t just for receiving favorable terms on a loan. Employers, rental agencies, and more are checking credit to ensure you are the type of person they want on board.

Why Does Credit Matter?

Your credit is based on a variety of factors: your credit history, your payment history, how many open accounts you have open, and a few others. It’s a great way to determine what your ability to repay a loan is. Lower credit means that you’re more likely to default which could end up costing the lender a lot of money.

Not sure where your credit score currently stands? Sign up for Credit Sesame and you can get your credit score for free. They also offer credit monitoring, which will help keep you protected against any suspicious activities.

So why does your credit matter when it comes to renting an apartment? When you read between the lines on a credit score, it’s more than just the ability to repay. It’s how trustworthy a person is.

Also Read: How To Get Your Credit Score Up Fast

If you’re an employer and you need to hire someone, would you rather have the person that consistently is late with their payments, mismanages their money, and often defaults on a loan; or would you rather hire the person that is trustworthy to repay debts, pays on time, and has never defaulted on a loan? The latter is likely going to be better for your company.

Consider if you had a rental unit that you needed to fill it with a tenant. Would you trust someone to pay their rent on time if they can’t repay their loans? Evicting a tenant is time-consuming and costly, something landlords want to avoid.

How to Get an Apartment with Poor Credit

If you happen to have poor credit due to some lapses in judgment years ago, it’s not too late for you. There are ways that you can rebuild your credit, and get a nice place to live. Don’t worry homelessness isn’t the only choice you have left!

Have a Steady Income – Your credit score is just one factor when determining whether or not your apartment application should be accepted. There are real people reviewing them, and you can make a case that even though your credit is low, you can still pay your bills. If you’ve held the same job, and you can show that your income is sufficient to easily cover the rent, then emphasize how you have the ability to pay when you submit your application.

Find a Rental that Doesn’t Check Credit – Generally speaking, apartments and units managed by professional property managers are those that will check your credit before signing a lease. That leaves a huge market of private landlords that may be more likely to overlook poor credit, or never check in the first place. Use the services of a Realtor, check online, and drive through areas where you want to live scouting out “For Rent” signs to find landlords that might not check your credit.

Repair Your Credit Beforehand – Good credit is going to be in your best interest long after you get into the apartment of your dreams. So even if you use a different method, don’t put this off! Credit repair can take a little bit of time. Long before you know you will need it, get started on the process. Then, when you decide to stop renting and buy a house, you can get the most favorable loan terms.

Have a Co-signer or Roommate – These two are basically the same with one exception: a co-signer might not live with you. If you aren’t averse to the idea of sharing a place to live with someone else, have the roommate be the primary person on the rental application (as long as they have good credit). If you have someone that trusts you and is willing to co-sign, then that’s essentially the same thing.

Good Credit Gets You Far

Some people come from wealthier backgrounds and it’s easier for them to build credit. Others have to work hard for everything, and credit wasn’t “handed” to them. No matter what your background, it’s always going to be in your best interest to ensure that your credit score remains strong, and it is constantly growing.

Working your way to that excellent credit rating throughout your adult life will help you find better places to live, land better jobs, and receive better terms on your loans.