If you have bad credit, it affects more than the interest rate on your loans and credit cards. It can also make it difficult to get approved for an apartment.
It’s not uncommon for a landlord to run a credit check during its routine tenant screening. “There are some landlords who don’t run credit reports on applicants,” says Brian Davis, co-founder director of education at SparkRental, “but it’s a sign of inexperience and laziness on the part of the landlord.”
Those landlords who run a credit check do it primarily to make sure they can rely on you to keep up with your payments. As such, it’s important to know what landlords can and can’t see and what you can do to improve your chances of getting approved.
There’s no minimum credit score to be able to rent an apartment. In fact, landlords and property managers can’t view your credit score when they run a credit check; all they see is your credit report.
And while a credit score is a pretty good indicator of what’s on your credit report, you don’t have to worry about a landlord setting a hard minimum. At the same time, you’ll want to review your credit report before you start applying to make sure you’re a good candidate.
The two primary factors landlords look at are your past payment history and your current debt load. If you’ve had late payments in the past or have collection accounts on your credit report, for instance, you may be too risky for some landlords.
The same goes if you have a lot of debt. If your debt-to-income ratio — your total monthly debt payments divided by your gross monthly income — is 50% or higher, it could be a sign that you have more debt than you can handle. And if you have to choose, the landlord may have less leverage than a lender to get you to pay.
If you’re brand new to credit, landlords may look more favorably on you than someone who has a history of delinquencies. But some may still be wary because having no credit history at all means you’re unpredictable.
So if you know a landlord isn’t going to find anything when they run a credit check on you, it’s important to highlight some of the reasons why they should take a chance on you.
For example, you can point to your lack of debt as a reason why you’ll always make your rent payment on time. You can do the same if the rent payment is a small fraction of your monthly income.
In other words, it’s possible to get an apartment if you have no credit history. But you’ll likely need to make your case to the potential landlord.
Not all landlords do a credit check, and some do just to make sure you don’t have any significant red flags. In general, you can find these types of landlords in low-income neighborhoods where more people may have a rough credit history.
It can also depend on how hot the rent market is, says Davis. “In lower-demand markets, landlords need to be more flexible and accept renters even with patchy credit,” he says. “In hot markets with high demand, landlords will be far more discerning about tenants’ credit.”
As you’re searching for an apartment, check the description to find out if the landlord requires a credit check. Some may even advertise that poor credit isn’t a problem. If there’s a fee to submit a rental application, that may also be an indicator because it takes time for a landlord to request and review your credit report.
If you can’t learn anything at all from the listing, don’t be afraid to call the landlord and ask.
If you have no credit or your credit history is in the bad or average credit score range, you may feel like you have little influence. But there are a few things you can do to convince the landlord to accept you.
Nobody likes a bad surprise, and landlords are no different. “Your best bet is to let the landlord know up front what they’ll find on your credit report,” says Davis, “and explain what happened.”
If you have medical debt you couldn’t afford, for instance, the landlord may view that differently than if you racked up a bunch of credit card debt then defaulted.
Landlords often require a security deposit in case you damage the apartment, often for the amount of a month’s rent. But if your credit isn’t in great shape, offering a higher deposit can help mitigate the risk the landlord is taking on you. Even if the landlord doesn’t take you up on it, they’ll appreciate the offer.
If your income is high or your debt burden is low, that could tell a landlord that you’re financially responsible. What’s more, it could be a sign that you don’t have a lot of other monthly payments that could compete with your rent payment.
If you can’t afford a higher deposit and your credit report just doesn’t look good, you may still have a decent chance of getting approved by getting a co-signer.
A co-signer essentially agrees to be equally liable for your rent payments under your contract. So if you can’t pay, the landlord can tap the co-signer for payment. The biggest drawback to this option is that it can ruin your relationship with a co-signer if things do go south.
Landlords don’t typically report your rent payments to the consumer credit bureaus. But there are a handful of services your landlord can sign up for that report your on-time payments, including:
Keep in mind, though, that you can’t self-report your rent payments. It only works if your landlord agrees to do it, which may be a tough sell considering these companies charge for their services.
Also, only the latest FICO® scoring model, FICO 9, incorporates rent payments into its calculation. And since most lenders still use older versions of the FICO score, your efforts may not yet have an impact.
Note, however, that if you get evicted, it could impact your credit history in two ways. One is if your landlord sends your bill to a collection agency, which reports it as a debt. The second is if you get sued, and the court reports the result as a civil judgment.
Getting an apartment is possible if you don’t have good credit. But depending on the situation, you may have to live in a less desirable neighborhood or do other things to make up for a low credit score.
As you shop around, take the time to talk to prospective landlords to get their expectations and to plead your case. While some may deny you outright, others may be willing to give you the chance you need.
Ben Luthi is a personal finance writer who has a degree in finance and was previously a staff writer for NerdWallet and Student Loan Hero. See Ben's profile on LinkedIn.