How to get an apartment with bad credit

Whether you’re nearing the tail-end of a lease agreement, you recently graduated college or you’re moving out on your own for the very first time, apartment hunting can be both exciting and scary. But if you think the hard part is finding a place that meets all of your requirements, you’re missing a key component of the rental-hunting process. Like it or not, your credit score may play a role in the selection of apartments you can qualify for.

Renters made up just under 35 percent of the nation’s households with around 45 million units being rented as per the most recent U.S. Census Bureau data available. And before any of those individuals signed on the dotted line, their potential new landlord likely did their due diligence and ran their credit. 

For most landlords, a lower score could be the red flag that prevents you from making it to move-in day. Think of your credit score as the grade point average of your finances. Responsible financial habits like paying your credit card or debt payments on time and avoiding carrying a hefty balance month over month will translate to a higher score. But a late or missing payment, higher balance or too many new credit inquiries could set you up to fail.

How bad credit impacts your ability to rent

Credit scores come in all shapes and sizes. As a general rule, it’s typically recommended that renters try to keep their score near the top of the fair credit range or better, or at the 620 range or above. 

That said, your approval odds for an apartment can vary depending on the individual landlord. Here’s a look at how many Americans fall into each credit score range, according to Experian.

A number of factors can ding your credit score and hurt your rental approval odds. If you have a history of making late rental payments, a previous eviction, foreclosure or bankruptcy, you could find it more difficult to get the green light from a potential landlord. Other negative credit habits like carrying a higher debt-to-income ratio, defaulting on loans under your name or auto repossessions also demonstrate to landlords that you may have trouble managing your credit and financial obligations.

If your credit score reflects any of these financial obstacles, know that many Americans are dealing with the same. And it’s not uncommon to fall within a less-than-stellar credit score range.

Average credit score by age  

According to Experian data, older Americans tend to have better credit overall, whereas younger generations still have some work to do. Then again, even the average credit score for Generation Z is in the “good credit” category, which includes FICO scores from 670 to 739.

Average credit score by income  

Data from American Express also breaks down credit scores by income, and this data lets us know that a consumer’s credit score tends to improve along with their salary. 

Top 7 states with the highest credit scores  

Individuals in some states also have better credit overall. Here’s a listing of the states with the highest average credit scores as of 2023, according to Experian.

Having a lower credit score could make a landlord reluctant to move forward with your application. This is especially true if you’re up against a larger applicant pool where other applicants have a better score than you do. In a crowded rental market where vacant apartments are receiving a stream of applications, your credit score could play a key role in whether your application is even considered.

How to rent an apartment with bad credit

If you’re wondering how to get an apartment with bad credit, you should check your credit score to see where you stand first. Once you have an idea of your current credit score, you try to get an apartment for bad credit with the following strategies.

Consider working with a different type of landlord

If you’re having a harder time securing a rental due to your credit score, that doesn’t rule you out of the applicant pool altogether. The kind of landlord you work with could make a difference. Some landlords can be more lenient than others. For example, when you rent a home or apartment managed by a property management company, you’ll likely need to check every single box to have the greatest chance of approval. These property management companies are hired to ensure that the strongest tenants are approved and accepted.

If you opt for an apartment rental owned by a private landlord, you may have a little more wiggle room. Private landlords typically own this property as an investment and tend to handle applications themselves, with their own set of requirements and expectations in place.

This doesn’t necessarily mean you’re in the clear, but the landlord may be more willing to rent their property to you if you can prove you meet their income requirements or provide letters of recommendation from someone they know. Credit score still matters, but a private landlord may be more willing to overlook a low score if you exceed all of their other requirements. Some landlords will also overlook your score if you offer to pay a larger deposit upfront. 

Find a cosigner, guarantor or roommate

A bad credit score isn’t the be-all and end-all of renting. There are a few ways you can make yourself more appealing to a potential landlord and get your foot in the door.

• Find a cosigner: A cosigner is someone who takes responsibility for your payment. This means they can be on the hook if you miss your rent payment. A cosigner provides landlords with an added level of protection if you fail to make your monthly payments. That reduces the financial risk involved for them, but it does mean putting a friend or family member on the hook for your rent which can be uncomfortable. Before asking a loved one to co-sign, it’s important that you both understand the risks involved. Assuming this financial risk could hurt your loved one’s credit score and increase their debt-to-income ratio, potentially making it more difficult for them to borrow money or secure a rental of their own later on.
• Use a guarantor: A guarantor works similarly to a cosigner but has fewer rights. A guarantor vouches for you and lets the landlord know that you’re good for your money. However, they are not entitled to live in the apartment or rental home.
• Look for a roommate: If your credit score isn’t strong enough to secure an apartment on your own, consider having a roommate who can make up for your lower score. If this individual can cover rental payments on their income alone, your landlord may be more willing to consider your application. 

Provide supporting documents and references

Another easy way to increase your odds of approval is to include any supporting documents or references that might help explain your financial situation or show your potential landlord that you’re trustworthy and reliable. Asking previous landlords, employers or even professors to write you a reference letter could tell this landlord more about who you are and why you’d be a great tenant. Having others vouch for you and your character could make all the difference and give the landlord the reassurance they need to move forward with your application.

In addition to reference letters, you might also consider including proof of responsible rental payment history, on-time utility and bill payments, and a snapshot of your account balances to show the landlord that you have the means to make payments and have a history of doing so.

This is, of course, in addition to standard income requirements, which usually ask that you earn at least three times the expected rent. When you’re on the hunt for a new home, you’ll want to make sure you have the following in hand so you can move forward as quickly as possible:

• Copies of at least three recent pay stubs
• An employment verification letter from your current employer
• Reference letters for yourself and any pets showing you’re both great tenants
• A snapshot of your savings account balance (be sure to black-out any sensitive information)
• Proof of identification
• Rental history

Pay more upfront

If your potential new landlord is still on the fence about moving forward with your application, you can also offer to pay a little more upfront. This could mean increasing the amount of the required security deposit or paying an extra month or two’s worth of rent. A security deposit is typically paid at the time of the lease signing and is used as an added buffer to protect the landlord if you fail to pay your rent or cause any damage in the unit.

Most landlords will return your security deposit to you as long as you haven’t broken any of the terms outlined in your lease agreement. In most cases, your security deposit will be equal to one month’s rent, though this amount can vary. Offering to pay a little extra could show the landlord that you’re serious about making on-time payments and plan to take good care of the unit.

Search for an apartment that doesn’t require a credit check

There are also bad credit apartments that don’t require a credit check at all, yet options in this category tend to be few and far between. These apartments may be offered by private landlords or larger companies that manage multiple units, and their availability will vary widely based on the city and state you live in.

You may also need to provide an additional incentive for the landlord to offer a no credit check apartment, such as an additional security deposit or a few months of rent upfront. You may be able to get an apartment without a credit check if you have a roommate with good credit who can be on the application with you.

The bottom line

Your credit score plays a key role in so many of life’s financial milestones. When you’re looking for your next rental apartment or home, knowing your score will give you a better idea of which homes you qualify for and if you’ll need to provide additional supporting documents to make yourself a more attractive tenant. 

The good news: Even if your score isn’t as high as you’d like it to be, there are still plenty of ways to boost your approval odds and land your dream home.

Frequently asked questions (FAQs) about apartments and credit score requirements

• What is a low credit score?
  

  According to the FICO scoring model, a “poor” credit score is considered any score within the 300-579 range.

• What can I do to raise my credit score?
  

  Checking your credit report and disputing errors, making on-time payments and keeping your credit utilization rate low are all ways to build and then maintain a good credit score.

• What do landlords look for on a credit report?
  

  Landlords typically check for a low credit score, a history of late payments, payment gaps, a significant debt-to-income ratio, delinquent accounts and derogatory remarks like auto repossessions or any accounts in collections.

• Do you need credit to rent an apartment?
  

  More than likely, your credit score will play a role in your ability to rent an apartment. However, rental requirements vary. Knowing your score will help you narrow down which apartments you have a higher likelihood of qualifying for.