Bad credit can generate all kinds of issues from difficulty obtaining a mortgage to securing a vehicle loan. Your credit history can also pose problems even if you’re simply looking for a rental.
You might not think that your credit score plays a role in the rental process, but it does in a huge way. In fact, some landlords might reject your rental application if you have bad credit even if you have a sizable income and a spotless history.
If you’re concerned that a bad credit will prevent you from finding a rental, consider these tips.
1. Find Rentals that don’t Consider Credit
The ideal way of finding an apartment with bad credit involves finding a proprietor that doesn’t perform checks. In general, apartment complexes are under the ownership of huge property management companies that need a credit check on every application.
Bear in mind that these kinds of apartments will most probably turn you down. Instead, look for individual landlords who own properties. They may be willing to risk if you don’t have a great credit history but have a solid income and a good rental history.
2. Find a Co-signer or Guarantor
Request a trusted relative or friend with good credit to cosign your rental application. Although you’ll be the only one residing in the apartment, a cosigner agrees to meet the payments in the event of a rent default.
This can offer a landlord the additional reassurance he or she requires. Of course, it could get complicated because somebody else will be responsible for your actions.
The last thing you want is your co-signer being forced to meet your rental payments, so make sure you can afford the monthly rent comfortably. It’s also important to maintain a realistic view about how your default could affect your relations with your co-signer.
3. Get Recommended
Getting somebody to vouch for your monetary responsibility can help dampen the impact of negative entries on your report. Contact people who have a financial relationship with you-former landlords, previous or current employers, and request a reference letter.
There’s a high likelihood of facing denial if you have unpaid balances, particularly to utility companies or other landlords.
You can soften the negativity on your credit report by issuing a letter that explains the circumstance that caused your economic issues. Ensure the letter describes how you’ve worked on your finances and state why you can manage a rental.
4. Pay in Advance or Increase the Security Deposit
Bad credit makes property-owners nervous because it indicates the possibility of you defaulting on the rent because you’ve defaulted on previous bills.
Nevertheless, paying in advance or providing a two-month security deposit eases their concerns. This option shows your commitment and provides landlords with extra money that can cover some of the damages and losses in the event that you default on the rent.
5. Be Honest
At times, bad credit isn’t an indication of bad financial management. You may have experienced a financial setback that was beyond your control or lost your job.
If this is so, be frank about it before the landlord performs a credit check. Your willingness to own up will grant you favor.
If you’re willing to share your space, find a roommate and see if he or she is willing to sign the lease solo if the landlord will permit one person to sign it. Alternatively, consider moving in with a roommate who’s mid-lease and can include you without a credit check.
These days, numerous landlords depend on a credit check to vet prospective renters, particularly in competitive markets. Therefore, if you’re thinking of finding a rental but are concerned about your credit, these tips will help you obtain approval for your rental application.
For more information on how to get your rental application approved with bad credit, contact us at Apartment Agents or leave a comment.