Renting an apartment: the role of your credit score

Finding the perfect abode is a blessing. When you go apartment hunting, you will realize how difficult it is to find a place that ticks all the right boxes. Let’s imagine that after months of hunting, you have finally found the perfect place. You are already planning where which piece of furniture will go.

But, you find out that in order to rent the apartment, there will be a rental credit check, whereby the landlords will be analyzing your credit score for renting. You might not think much of the landlord credit check. However, trust us when we say that your credit score greatly influences the chances of you securing your dream house.

There are various landlords that assign a minimum credit score to rent an apartment. And if you don’t meet the benchmark, you can bid the chance of renting the apartment goodbye. However, on the other end of the spectrum, there are many landlords that only ask for your credit score to see if you have any evictions or rental-related issues in your report. Here, having a bad credit score might not harm you necessarily.

The Role of Credit Score in Renting

There are various people who apply for renting a given place. Landlords run a background as well as a credit check on these people to decide which of them can best deliver timely rents. Your credit score report is taken as evidence of how responsible you have been with your payments so far.

For someone who has recently taken debt or recovered from one will find that their credit scores aren’t exactly exemplary. Such people might feel that the credit score requirement is not justified. However, if you think about it from the landlord’s perspective, it is easy to understand where they are coming from. Leasing out space to people is a form of business. And everyone wants to reduce the risk associated in their business. Running a credit check allows landlords to do so.

What Is a Landlord Credit Check, Exactly?

To rent apartments, you have to fill out applications. In the rental form, most landlords mention that there will be a credit check during some point of the process. The application demands your consent for it since no one can check your credit report without you authorizing it. Remember, such permissions might be present in the fine prints of the application sometimes. Read it carefully before thinking that you are applying for a no credit check apartments. If you aren’t comfortable with such checks, make sure to avoid landlords that ask for it.

Apart from asking for access to your credit report, landlords have other ways to check your financial standing. This include:

Landlord Associations

These associations deliver tenant credit reports in return of a fee. National Association of Independent Landlord is one such organization. However, when you opt landlords opt for such reports, they are counted as hard inquiries for you and may cause your credit score to decrease.

Tenant Screening

There are various tenant screening firms operating. Now, not all of them deliver credit reports. But, some do. For instance, e-renter.com is a tenant screening website that allows a landlord to know whether a given applicant has a credit score within the range set by the landlord. Other services may also offer information about evictions and bankruptcies. Since these are classified as a soft inquiry, your credit score doesn’t bear the brunt of it.

Credit Bureaus

For credit bureaus to deliver credit reports, you are the one who has to demand the check and hence this too falls under soft inquiry. Popular credit bureaus include Experian, Equifax, and TransUnion.

Hard Copies

There are many people who don’t prefer to run credit checks online. Either they might ask about your credit situation in person or ask you to submit the report to them. Even if they ask for a credit check, you might end up paying for it. Usually, the fee of running a credit check is incorporated in the application fee. If the landlord chooses to do a thorough check, you might be asked to pay more.

Ideal Credit Score for Renting an Apartment

There is no hard and fast rule about what makes a good and bad credit score for renting places. Mostly, both agencies and people require applicants to have a score of at least higher than 620 to qualify.

So, if you have a score lower than 620, this might signify a default risk to landlords, and they might be less willing to rent you their property. This is especially true if there are a lot more applicants for the rental space.

Getting an Apartment With a Poor Credit Score

Do you have a bad credit score? Are you wondering about how to rent with bad credit? Well, here is what you can do.

Know Your Financial Standing

Don’t overestimate your financial status. Instead, before you apply for rent, make sure you make a request to access your credit report. You can get it for free annually via www.annualcreditreport.com. Know what your credit score is and if you think there are any discrepancies that are bringing your score down, let the credit bureaus know so that the mistake can be fixed.

Don’t Apply Everywhere

Be careful when sending in your rental applications. Do your house hunting, know of their requirements, ensure that you fulfill those requirements and only then send in your application. Why? This is because the more applications you submit and the more people that request a credit check on you, the lower your score will get.

Focus On Other Financial Measures

If you have a poor credit score, you can still prove your financial soundness. How so? By providing evidence of your current employment. However, make sure that this is a permanent job for it to have the same effect. Give the name of your employer as a reference so that the landlord can check your claims.

The More References, the Better

Apart from your employer, deliver other recommendations as well. This can include contact of your previous landlords and people who can vouch for you.

Think About Renting With Other People

If you don’t mind sharing the space with other people, it is better to rent places as a team rather than alone. Here, the creditworthiness of all individuals is, and their average is taken. This increases the chances of you securing the place since the risk reduces for the landlord.

Give Advance Payments to Establish Trust

To prove that you can give rent timely, you might want to pay upfront. Inform the landlord that you are willing to pay four months in advance. The more money you put up front, the less risky tenant you seem.

Look For Options That Don’t Run Credit Checks

Not everyone runs credit checks on their tenants. Instead, you can find bad credit apartments as well. If you think that your score isn’t good enough to be accepted by those that do run checks, limit your options to those who don’t run them altogether.

Which Type of Apartments Doesn’t Check Credit?

Large companies always run credit checks. Hence, big complexes won’t be the best option for you. Instead, you should look at individual landlords instead. Try to find people who are willing to give you a chance based on your excellent rental history and income rather than a poor credit score.

Where to Find Rentals?

How should you begin your apartment hunting adventure? Here are ways to find rentals.

Craigslist.org

This is an online listing where house and apartment owners advertise about their rentals. For this, go to the housing section of the website. Here, you will find all kinds of houses available for rent.

Newspaper Classified Sections

Usually, a local newspaper has a classified ad section where people advertise about selling and renting properties. If you are not into reading newspapers, you can always look it up online.

Real Estate Agents

If you don’t want to make an effort of scrolling through ads, you can visit a real estate agency and ask them to look for an apartment for you.

Drive Around the Neighborhood Where You Want to Move

Some people don’t advertise in newspapers or list their property with agents. All they do is put up a sign in their yards. Look for such signs in the neighborhoods of your choice.

Conclusion

Know what your financial standing is before you apply for renting a place. Make sure your credit report is accurate. If it isn’t, look for other ways to prove your creditworthiness. You can get the house of your dream with a poor credit score. You just need to know how.