How To Score A Great First Apartment With Poor Credit History

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Snagging your first apartment can be tough, especially if you have poor credit (or even no credit!). But you can still be an attractive rental candidate for that awesome one-bedroom apartment, even if your credit score is nothing to write home about. Landlords and property managers look at other factors besides just credit score. And sometimes, those other factors can tip the scale in your favor. Here are seven ways you can make yourself attractive to a landlord, even without the strongest credit score.

1. Have a stellar past rental history

The most relevant piece of information about you for landlords is your rental history, potentially even more than a credit score. But if this is your first apartment, you probably won’t have any rental history. Bringing in character references, such as from a teacher or employer (or providing the landlord with their contact information) can help demonstrate that you are reliable and dependable.

You may, however, first need to establish some type of rental history, especially if you have poor or no credit. Start paying rent to your parents, or rent out a room in someone’s house. That way, you can show potential landlords that you can pay rent regularly and on time. Be sure to get receipts or have some type of proof of payments to show potential landlords.

2. Earn a high salary

If you make a good income, your landlord may forgive your poor credit score, even in a red-hot rental market. “I’ve had [bad credit] tenants with high incomes and over a year’s worth of rent in their bank accounts be accepted,” says Klaus Gonche, a South Florida real estate agent. But what do landlords consider a high annual income? A good benchmark would be at least 40 times the monthly rent. For example, using this guideline, if rent were $1,200 a month, you would need to earn at least $48,000 a year. Prove your income by showing the landlord your pay stubs for the past year. And consider showcasing your income on Trulia’s Rental Resume, a tool that lets renters highlight their qualifications, like move-in time frame, occupation, income, and more.

3. Have savings

Just making big bucks isn’t necessarily enough if you have poor credit. You might have lots of debt, for instance, which can eat up a lot of that large income. So show your potential landlord your bank statements, proving you have reserves available. It’s a good idea to have both a checking and a savings account, and you should ideally have several months’ worth of rent saved up. If a landlord sees that you have money set aside, they may feel more confident in your ability to pay rent each month.

4. Be honest (and communicate well)

Be upfront with potential landlords. Explain the reason your credit score is not very good and how you will be a responsible tenant anyway. Maybe you made a poor financial decision in the past, maybe your credit utilization is high (from using one credit card for everything and then paying it off each month — actually a good thing!), or maybe there’s an error on your credit report (it happens!). Landlords are free to waive their own requirements … as long as they treat all applicants the same way. This method works best when you’re dealing with individual landlords as opposed to a big management company that might not be able to bend the rules.

5. Offer to set up automatic payments

Here’s a secret: Landlords love receiving rent on autopay. Offer to allow your landlord’s bank to deduct rent from your bank account through automated clearinghouse (ACH), a system that moves money from one bank account to another. That helps ensure your landlord will be paid — and on time.

You’ll need to demonstrate you’ll have enough cash in said bank account to cover those automatic payments. If you’ve been chronically irresponsible about paying your bills, for example, earning you a bad credit score, potential landlords probably won’t trust that you will keep enough in your account. “When I see utilities and cellphone companies with delinquent payments, that is a red flag for me. Especially when it is coupled with many unpaid and high-balance credit cards,” says Denise Supplee, a Pennsylvania real estate agent and co-founder of SparkRental, a rental automation service. “This tells a story of irresponsibility more than one of hard times.” However, if you can show a steady income bolstered by a hefty savings account, and you sign up for ACH payments, you just might get that apartment.

6. Agree to pay more upfront

You typically need to pay first month’s rent plus a security deposit when you rent an apartment. That means you can make your application stand out by offering to pay not just one month and security, but two — or even three — months’ rent plus security in advance. Cash offers are always attractive. Just make sure you then start paying your rent on time when it becomes due.

7. Use a co-signer

If nothing else works, call in some backup to help you rent with bad credit: a co-signer. If you can get someone with good credit to co-sign for you, the landlord might agree to rent you that apartment. Note that if you don’t pay your rent, the landlord will ask your co-signer to do so, which could strain your relationship with that person.

 

Written by Laura Agadoni

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