How to Pass a Rental Credit Check with Bad Credit in 4 Steps

Q

How can I pass a rental credit check with bad credit?

A

Find a cosigner, offer to pay rent early with a higher security deposit, and show detailed employment histories and bank statements to show you are responsible with money.

With such a competitive rental market to contend with, it can be difficult for applicants with bad credit to find housing. Sometimes a poor credit score is due to difficult circumstances outside of your control, so it can be frustrating when this is the reason you’re denied a rental. However, landlords must run these checks to keep themselves safe and make sure they’re protecting their properties.

And just because an applicant has bad credit doesn’t mean it’s the end of the road. Take a look at the sections below to learn more about this process and what you can do to pass an apartment credit check:

Why Do Landlords Require an Apartment Credit Check?

illustration of landlord throwing money and financially responsible tenant

Though it may seem like overkill considering all of the other documents required in a rental application, the credit check is actually one of the most important parts of a tenant’s background information. Credit checks are a standard piece of almost any rental application in the U.S. Maintaining a property is very expensive, and finding new tenants is a stressful and time-consuming process.

By doing thorough background research upfront, landlords are ensuring that they find responsible, financially-stable tenants who will be able to pay rent on time each month. Otherwise, landlords and tenants might find themselves in the middle of eviction proceedings, which is a headache for everyone involved!

What Information is Included on a Rental Credit Check?

what red flags indicate to landlords on a rental credit check

Most landlords or property management companies will partner with one of the three major U.S. credit bureaus: TransUnion, Experian, or Equifax. These checks actually reveal much more about a tenant than just their credit score, with the goal of discovering any suspicious financial activity in their background. Rental credit checks will allow landlords to view tenant information such as:

  • Employment history
  • Social security number verification
  • Credit score
  • Payment history
  • Fraud indicators

When analyzing this information, landlords are scanning for a number of red flags that could indicate the applicant would not be able to pay rent regularly or would be an unsafe addition to the community. These red flags include:

  • Chronic late payments
  • Low credit score
  • A history of evictions
  • Bankruptcy declarations

Landlords and tenants can learn about this process more in-depth with our guide to rental credit checks.

What is the Minimum Credit Score to Rent an Apartment?

credit report recommendations red and green scale

The minimum credit score needed to rent an apartment varies from location to location. Wealthier, more competitive areas will require a higher minimum score, as will new or luxury buildings. However, a good rule of thumb is that most landlords look for around a 600 credit score. Anything under 600 is considered bad credit, but there are ways to get around this issue.

4 Steps to Renting with Bad Credit

icons and suggestion for how to rent with bad credit

Just because you have a low credit score doesn’t mean you’re completely out of luck when it comes to renting a nice place. There are steps you can take to highlight your assets on your rental application. It’s really all about showing the landlord that you would be a responsible and respectful tenant, and therefore a good investment for them.

  1. Find a Cosigner: The surest step you can take to getting approved is to have a cosigner or guarantor sign the lease with you. This person will be legally responsible to pay your rent if you are unable to, which will grant the landlord peace of mind as it is ensured that the rent will be paid no matter what.
  2. Offer Advanced Payments: In order to show that you are serious about renting the apartment, you can offer to pay the first month’s rent early. This will both show your financial stability and also incentivize the landlord to take the listing off the market.
  3. Offer More Money: Though this isn’t an ideal solution, you can offer to pay slightly more monthly rent than what they were initially asking for, or offer to pay a double security deposit. Offering more money upfront is a good way to show you are serious about both parties’ investment.
  4. Leave a Paper Trail: Craft a narrative about your financial and job history to show the landlord that you are living a financially responsible life. Even if your credit score is low due to things like student loans, you can provide more documentation than is required to demonstrate to the landlord how you’ve kept up on payments and reduced your debt.

Apartment Credit Check Scams Landlords Should Watch Out For

illustrations for credit check scams landlords should watch out for

Though the rental credit check is meant to protect landlords, there are ways applicants try to get around this process. Landlords, here are a few red flags to watch out for, and tenants, here are a few moves you definitely shouldn’t try if you’re trying to be taken seriously!

  • No previous landlord references: This point is situational, so landlords should use their best judgment when deciding if this is a red flag. It’s one thing if a new college grad doesn’t have any past references, as this is probably their first apartment. However, it would be suspicious if a middle-aged applicant wasn’t able to provide references as it indicates something went wrong with their last rental.
  • Multiple occupants but only one on the lease: A major red flag is if there is going to be one rent-paying adult on the lease, but multiple adults living there. This indicates that the other occupants may have issues in their background checks that they know wouldn’t pass inspection, and it’s important for landlords to know who exactly is living in their units.
  • Cash payments over checks or direct deposit: If an applicant insists on paying rent only in cash, this could imply that they are having financial issues and aren’t able to open a bank account, or that the money is coming from illegal activity. Again, use your best judgment in these situations as it’s possible your tenant is just eccentric or old-fashioned.

How to Pass a Rental Credit Check FAQ’s

Q&A bubbles on a background of green question marks

Below are the answers to a few of the most commonly-asked questions when it comes to passing an apartment credit check.

Can I Get an Apartment with a 500 Credit Score?

Though this is below the recommended minimum of a 600 credit score, you can get an apartment with a 500 credit score. You may not be able to rent the apartment of your dreams until your credit improves, but you can find a good home to rent by highlighting your other application assets. This includes showing the landlord steady payment and employment histories, along with utilizing the help of a cosigner on the lease.

How Can I Convince My Landlord to Let Me Rent with Bad Credit?

Again, you will need to prove to your landlord that you would be a solid investment for their property, even with a sub-par credit score. You can do this by highlighting the work you’ve been doing to reduce your debt through detailed documentation, along with offering to pay a larger security deposit.

How Can I Rent with an Eviction?

Having an eviction on your record is one of the trickiest red flags to work around, because it will make other landlords believe you are a bad renter. In this case, the more information you can provide the better. Explain the situation to your landlord in an application cover letter, highlighting improvements you have made to your financial situation and steps you are taking to live more responsibly. Again, you will probably not be able to rent the apartment of your dreams, but a reasonable landlord will be understanding if you can make a good case for yourself.

How Long Does it Take to Hear Back About a Rental Application?

In most cases, it should take 2-3 days for you to hear back about your application. During this time, landlords are pulling the data from your credit check and analyzing it for any issues, along with reading through the rest of your application materials. In high turnover markets in major metropolitan areas, the application turnaround time can happen in just a day. If you feel your application is taking a long time to be reviewed, you should feel free to contact your agent or the landlord directly.

How Can I Quickly Raise My Credit Score?

Unfortunately, there’s no surefire way to raise your credit score in a matter of weeks. This is one issue that takes time and dedication to see results. Make sure you are practicing “financial hygiene” by keeping up on all monthly bills. Avoid spending on credit cards, and consider increasing your credit card limit so that your utilization rate goes down. The best way to raise your score is to request a credit report from one of the three major credit bureaus (TransUnion, Equifax, and Experian) and do a deep dive. Clean up any outstanding accounts so that your record is positive. Remember, you get one free credit report per year by law!

We hope this guide helped you learn everything you wanted to know about how to pass a rental credit check. If you need additional information about the tenant screening process, be sure to visit TurboTenant.

Share on facebook
Share on twitter
Share on linkedin
Most Popular Posts

Interested in streamlining your rental process?

TurboTenant makes managing your property simple with features like one-click rental marketing, extensive online applications, and free credit & background checks for landlords.

NEWSLETTER SIGN UP

Stay up to date on the ins and outs of being a landlord.

Subscribe to our weekly newsletter so you don’t miss out on our latest articles and resources.

TURBOTENANT BLOG

Read Our Latest Articles

Join 250,000+ landlords that choose TurboTenant to streamline how they manage their properties.

It’s completely FREE for landlords. No tricks or trials to worry about. So what’s the harm? Try it today!

Coronavirus Resources for Landlords

Guides and reports to help landlords navigate the COVID-19 pandemic.