Having a roof over your head has been a driving force since the first humans sought shelter. They had a lot of worries, but bad credit wasn’t one of them.
All they needed to rent a cave was a few animal skins and perhaps a promise not to paint on the walls. Times have changed. These days you’ll need a credit score of at least 620 for most apartments to let you in their doors.
If your credit score is below that, there’s no reason to panic. There is plenty of reason to prepare, however.
Get a Co-Signer
The simplest remedy is to get a co-signer who has good credit. That person would essentially guarantee the lease will be paid. A co-signer is legally responsible for paying 100% of the rent until the lease term expires, in the event that you cannot. Many relationships have been soured when a co-signer is asked to pick up the tab, so be extremely careful before sharing responsibilities with a co-signer.
Find a Roommate with Better Credit
Finding a roommate with better credit can also be persuasive to a property manager. The hitch can be finding a suitable roommate or person who will pay up if you default on your rent payments. Besides helping you qualify for an apartment, deciding to split expenses with a roommate is a good way to save money. With a roommate, you can save by splitting other costs like utilities, cable TV and internet.
Pay A Larger Deposit
If you don’t have a loyal friend or family member who’ll assume financial and legal responsibility, you can offer to pay a larger initial deposit. Landlords typically require two month’s rent as security deposit, though regulations limiting that vary from state to state.
Offer To Pay Higher Rent
Sweetening the pot might entice a landlord to overlook a poor credit score. You can also offer to pay a slightly higher rent.
The potential hitch here is affordability and/or having cash on hand to make a larger deposit. And laws sometimes prohibit property managers from accepting more than two month’s rent.
If a statute doesn’t stop them, some apartments have strict rules limiting how much they will accept. That usually occurs with larger apartment complexes run by management companies.
Try Family-Owned Apartments
One way around that is to look for smaller apartment complexes that are often family owned or run by private individuals. They are more likely to be flexible in negotiating a lease.
A good place to look for them is Craigslist or classified newspaper ads. You can also ask a real estate agent for referrals or drive around the neighborhood you want to live in and find a “For Rent” sign.
Know Your Credit Score and Financial Weaknesses
Whichever rental office you end up in, the best defense is a good offense. In other words, anticipate the property manager’s concerns and meet them head-on. Some are concerned with qualifications beyond credit.
“We have several landlords and property managers nationwide and their qualifications vary,” a spokesman for the American Apartment Owners Association said. “Some landlords don’t take credit into account at all. These landlords only care if the applicant was ever evicted or if there are criminal convictions.”
If you fall into one of those categories, say so upfront and have an explanation ready. But credit scores still play a major role at most apartment complexes.
If your score approaches the 620 threshold, you can show your financial responsibility by having a letter of recommendation from a previous landlord. A track record of paying rent on time can convince a skeptical landlord to take a chance on you.
If you have had trouble paying on time, explain why. Landlords are human and will likely be sympathetic if your financial problems were caused by a medical debt or other unforeseen developments.
The U.S. Census Bureau says the affordability standard for housing is 30 percent of your income. Provide pay stubs or bank statements to show you can make the payments. It can help if you offer to pay through direct deposit from your bank on a specific date every month.
Be honest and open with landlords. They will be impressed if you recite your flaws before they do. Tell them your credit score and that you realize it might cause concerns.
Federal law gives you the right to a free credit report every year from the three credit bureaus – Equifax, Experian and TransUnion. You can order it online at www.annualcreditreport.com.
Then you can relax the next time you need a roof over your head. The biggest worry for a landlord will be whether you’ll paint the walls, not whether you can afford to live inside them.