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How to Rent If You Have Bad Credit

Nobody wants to feel like they have an obstacle in life they can't overcome. However, when bad credit trails behind you, certain things start to feel out of reach. This is especially true when it comes to renting a home.

If one of the first things a property owner checks is your credit score, how do you get past a low number to live in your dream home?

The causes of bad credit

A low credit score, a.k.a. bad credit, isn't always a result of doing something wrong. Sometimes, you're simply not doing enough. It can get complicated, but even if you pay all your bills on time, you can still have a lower-than-expected credit score for a variety of reasons:

  • You're using too much of your credit limit. This happens when the balance on your credit card(s) is high. Even if you're paying them down each month, you're still carrying a higher-than average balance, and that gets you dinged.
  • You've missed one payment. “The impact of a payment mishap fades with time," says NerdWallet, so this may only impact you if it's a recent event.
  • You're a victim of identity theft and another person has messed with your credit.
  • You've applied for too many new credit cards. With each application, you can lose a few credit score points.

There are a few other issues that could bring your score down, but these are the most likely culprits. If you have a score that you feel is lower than it should be, make sure none of these issues are lurking in your credit history.

What is the lowest credit score to rent a house?

If each ding can impact your credit score, how many tips the scale into a “bad" rating? The answer will vary based on what you're trying to do and who's checking your credit. When renting a home, property managers will have different definitions of what constitutes good credit. There are averages, though, that can help you know whether you'll need some extra support going into the rental approval process.

It's all a numbers game, and the minimum credit score to still look good to a property manager is between 600 and 620. However, a universally good credit score hovers around 700. The scale goes all the way up to 850, so there's plenty of space to reside in the 'good credit' range. If life events do bring you into the 'bad' credit zone, don't fear. Finding housing for rent with bad credit can happen. You may just need a little extra help proving your case.

Prove your reliability

The first thing to do when you have bad credit is not hide it. A property manager will find out anyway, so get ahead of the issue by being honest and upfront. Tell them your credit score, but immediately follow up with how you're improving it to make a better impression.

If a financial setback took down your credit, bring proof of how you're working to make it better. Show how you're hunting for work if unemployed. Bring statements you've paid off over the last few months if you have large medical bills. Showing you're becoming more reliable can help overcome the concerns typically associated with bad credit.

Find a trusted co-signer or roommate

When you fill out a rental application, you should always bring certain documents to the table. Proof of employment, letters of recommendation, bank statements, etc. But what about bringing along an extra person? A co-signer, a trusted friend or family member who promises to cover rent costs if you can't, can be just as valuable when renting a home with bad credit.

Consider them the filler that puts your credit score back up in the good range, but be sure you've talked with them beforehand about what would happen if you do end up needing their help. Make sure they understand your plan for paying them back if it becomes necessary.

Even without a co-signer, having another person to rent a home with you can help repair bad credit. Bringing in a roommate not only provides another person to cover the cost of rent, but can also introduce a higher credit score into the application process.

Additionally, if a property manager is OK with just one person signing the lease, and your roommate has a higher credit score, you've solved the problem of bad credit entirely (at least on paper.)

Make some financial concessions

You know the saying “money talks?" Well it does, even when you're renting a home. If a property manager is hesitating on renting you a home because of bad credit, quiet their nerves with some cash. Offer to pay an extra month's rent upfront or agree to a larger security deposit.

You can even offer to pay a little extra in rent each month across the term of your lease. “Not only does this show your commitment, it also provides them with extra cash," says Forbes. Having this extra buffer demonstrates how confident you are in being able to afford the house.

It also helps if you offer to pay rent via direct deposit through a service like RentPay. This way, the property manager doesn't have to worry that your check will bounce or a payment will be late. Giving them the assurance of regular payments can help build confidence taken away by a bad credit score.

Avoid credit checks

When all else fails, you can simply look for properties that don't require credit checks at all. You'll have a much shorter list of possibilities, but certain listings will say whether or not a credit check is required.

In these instances, it's extra important to make sure everything feels legal and proper and that you're signing a lease that makes sense.

Finding housing for rent with bad credit is possible

Yes, bad credit can make it harder to rent a home, but it doesn't have to stop you in your tracks. Armed with the right evidence that you're a strong renter with people in your corner to help if things get tough will help you find a home.

So, don't let bad credit keep you down. Get out there and keep looking at properties. Schedule those virtual tours and keep talking with property managers to find the right fit.

Categories: Renters

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About the Author
Lesly Gregory

Lesly Gregory has over 15 years of marketing experience, ranging from community management to blogging to creating marketing collateral for a variety of industries. A graduate of Boston University, Lesly holds a B.S. in Journalism. She currently lives in Atlanta with her husband, two young children, three cats and assorted fish.