The Minimum Credit Score You Need to Rent an Apartment
Your credit score is one of several things that might impact your ability to rent an apartment. Landlords and property managers want to know that they will get paid.
Your credit score can often give them the information they desire as it indicates how well you handle financial obligations. And often, these landlords and property management companies require a minimum credit score to rent an apartment. Let’s dive in to learn more.
What Is the Minimum Credit Score to Rent an Apartment?
Let’s start with this one fact: there is no specific minimum credit score to rent an apartment. Requirements tend to vary, and some places do not even pull your credit score.
In fact, my very first apartment did not request a credit score check. Instead, the manager wanted a list of references and proof of income. However, I live in a small town where things are often handled a little differently, and not requiring a credit check does not happen everywhere.
The point is that things can vary greatly. And even those places that require a credit check may not rely so much on your score as what is on your credit.
Let’s make sure you are prepared for all of it. This guide goes over general credit score requirements and other credit-related items that can impact your chances of getting approved.
General Credit Score Requirements
Again, there is no one credit score that everyone looks for. However, there is a basic range that makes you more likely to be approved.
Most landlords and property management agencies are happy with a FICO score of at least 620, which is considered “fair” credit.
Typically, anything from this number up indicates that you handle your financial obligations responsibly.
You might find yourself running into higher credit requirements in high-rent locations. For example, renting a small country home will likely come with a lower barrier to entry than a high-rise in New York City. The higher the rent, the more responsible you’ll want your credit score to be.
Also keep in mind that if you have a low credit score, you may have additional requirements. For instance, some apartments charge a higher security deposit if you have unfavorable credit.
What If My Credit Score Isn’t High Enough?
Good news: If your credit score isn’t high enough, you can fix it. Start by getting a copy of your credit report to determine why your score is so low. You can then develop a strategy to fix it. This might mean you need to:
Pay off old debts
Open a new line of credit to increase your credit utilization
Leave your accounts open for a while longer
Make on-time payments for several months
Open a different type of credit account to improve your credit mix
You should consider signing up for a credit monitoring service like Credit Karma. It’s completely free, breaks down your credit score, and gives suggestions for how to fix it.
Make Smart Financial Decisions with Creditry Store.
Other Factors Landlords Consider
There are several other factors that landlords and property managers take into account that may weigh more heavily than the score itself. The following are three of the most important ones:
Type of debts
The type of debt you owe can play a big part. Medical debts can impact your credit score, but most lenders and landlords overlook this. They are more concerned with non-medical debt, such as personal loans and credit cards.
Rental History
This is going to be a big factor. Potential landlords want to know what kind of renter you’ll be. What better way to do that than to learn what kind you’ve been in the past?
If you have ever been evicted or not paid your rent, it may show up on your credit report. If not, there are rental report companies that provide this information for landlords.
Debt-to-income ratio
No credit score in the world will help if you owe more money than you make. Landlords and property managers consider your debt-to-income ratio to make sure you can afford the rent in addition to your current debt.
The DTI required depends on where you apply, but you can usually expect this to be between 30 percent and 40 percent. You can calculate your DTI by adding up all monthly debt and dividing it by your gross monthly income.
While these three factors are some of the most important ones, different places require different things. You’ll want to ask what specific requirements there are for each apartment you’re interested in.
If you do not get approved for the apartment, ask the decision-maker why. They’ll usually give you an overview of any issues they ran across so you can know what exactly to work on.
Can I Rent an Apartment With Bad Credit?
Yes, it’s totally possible to make it happen. The key is in finding the right landlord and getting some things in order before applying.
These tips can help:
Find An Independent Landlord
While not always the case, property management companies are usually more by the book than independent landlords. This is because property managers work for the landlord and need to follow the rules. Landlords can do what they want since it’s their property.
Often, this means they might not require a credit check. Even if they do, they might be willing to work around what’s there. If you can find an apartment with an independent landlord, you might have a better shot at getting the apartment.
Ask Friends and Family
Sometimes, you’ll know somebody who knows somebody who knows somebody else. And that somebody else might help you out because of your connections. Ask friends, family, and even coworkers if they know anybody with an apartment for rent.
Pay In Advance
The bottom line is that the landlord or property managers want to be sure you will pay your rent. If you can offer to pay several months in advance, they might be willing to forego the credit check.
Be Ready to Explain
Everyone has found themselves in some sort of trouble in the past, whether it was their own fault or not. If you have some bad marks on your credit but can give a good explanation as to why, the landlord might be willing to work with you.
For example, let’s say that for about a year, you missed payments all of the time because of sickness or job loss. If you can provide proof of reason and perhaps show receipts of you working to make up for the missed payments, most people will try to give you a chance.
On the other hand, if you have been missing payments for years and have not made any attempt to pay what you owe, you might still have trouble. It would look like you just were financially irresponsible and probably not going to pay your rent.
Conclusion
If you have time before you need to apply for an apartment, or if you’ve been turned down, focus on getting your credit in order. The Goalry Mall has excellent tools and educational resources to help you check your credit, set financial goals, and much more. By putting the power of the Goalry Mall to work for you, you can whip your credit into shape and achieve overall financial stability.