We want to show you; it is possible to rent an apartment with bad credit. It can be challenging, but it is possible to lease again, even if you have defaulted on your rent in the past. Leasing an apartment is a simple process if you have reliable credit, but everyone does not have good credit and still need to live somewhere. There are several things you can do to give you a better chance of success in renting an apartment or home. Be prepared and do not get discouraged, if you get some rejections along the way. Remember people rent with bad credit every day, and you can be one of them.
Things to Consider doing when Renting an Apartment or House:
1. Give a Reason for your Poor Credit
It is essential, to be honest with the property manager. They will find out anyway when they run a credit check. Before they run your credit, explain the reason for your poor credit history. A history of late or missed payments can disqualify you unless you have an acceptable explanation for your situation.
Many people have a poor credit history because of no fault of their own. You may have recently divorced, or your spouse is deceased or had to flee domestic violence, etc. Make sure you have all your documents to confirm the reason for your bad credit history. Many property managers will work with you, even if you do not have good credit. Also, check out How to Apply for Government-Assisted Housing
2. Pay Off Previous Renters
Paying off any collections or judgments for other apartment rentals is almost mandatory. Most apartment agencies will not lease to you until you have paid off debt to a previous property owner. When a property manager sees that you left an apartment owing rent or damaging charges, they assume you are a risk. Paying off old debt shows good faith and accountability.
So, the first thing you want to do is pay anything you owe the previous landlord. If you know you are going to move in say six months, begin paying that debt now. Talk to the creditor and ask them to list your debt as “paid in full” or removed after you pay them off. Many will agree to this as they want their money.
3. Show them the Money
If you are trying to rent an apartment with bad credit, you will have to be a little more creative in your approach. You have to convince the property manager, you are rehabilitated and are no longer a rental risk. You should not have problems renting if you can pay four to six months of your lease in advance.
Being credit poor does not necessarily mean you have no access to money. For instance, if you are renting the apartment for a six-month period, the landlord may require a 4 or 5 months rent up front. This is what many noncitizens do, who cannot prove credit status or have a U.S. social security number.
4. Look for Private Renters
Some private renters will not do a credit check, especially if they are anxious to occupy the property. However, if they do check your credit, let them know you are willing to put up a sizeable deposit to get the apartment. Or if renting a home ask for a month to month lease.
If you can pay the additional deposit, it will give you the opportunity to establish an excellent rental history for the next time you move. Of course, you need to pay you to rent on time, every month, and comply with all terms of your rental agreement. Check out how to get rental assistance from HUD.
5. Use Positive Rental History
Get letters of recommendation from people you have successfully rented from in the past, to prove you are a great tenant, who has paid your rent on time. Your history will help prospective renters to see you have paid rent on time for several years. Renters will also be able to see a previous eviction was a one-time situation, and you are steady. Some renters will give you a second chance; especially private renters.
6. Co-Signers can Help you Rent an Apartment with Bad Credit
You may be able to rent an apartment if you have someone with excellent credit that is willing to co-sign for you. People do not like to co-sign for other people’s debt. You have to know someone pretty well for them to take a chance on you.
Get someone to co-sign for you. A co-signer is a legal renter along with you. Make sure you are in good standing with the cosigner as they can pull out of the agreement at the end of your lease if there have been any problems, like late rental payment; which will affect the co-signers credit. You can sweeten the offer with the co-signer, by putting up some collateral such as a car, boat, etc. for the first year.
7. Start Working on your Credit Now
To avoid having to rent an apartment with bad credit, change the narrative. There is no time like the present to begin developing good credit. Find out what you owe. Check out Creditkarma.com to get an idea of your credit situation. It is free, and you can see what is in the collection, and any positive credit you have established. Find out which items are going to fall off and concentrate on newer debt. You may have several collections companies on your report.
- Confirm your debt is genuine
- Deal with one creditor at a time
- Challenge anything that is not correct
- Look for items about to fall off soon
- Request the name of the name, date of the debt, and the id number for original debt
- Contact the original debtor, to confirm the date and item number on your credit report
Get a secure credit card from your bank to begin re-establishing credit. Only use about 10% of your card balance. A secure credit card is to prove you can handle the financial responsibility. Use the new card as a tool, to better credit. It is a good idea to take one small bill, and have that amount automatically deducted each month from your card. Then put the credit card away. After one year your bank will re-assess if you are eligible for a regular credit card.