You Can Rent A House With Bad Credit
If you’re planning to relocate in the near future you’ll know just how stressful hunting for a rental can be - especially if you’re worried that your credit score will result in denied rental applications.
To ease your concerns and let you focus on the other important aspects of moving, here are strategies you can employ to find a home that doesn’t require a FICO score of 800 to rent. Read on to find out how to rent a house with bad credit.
Know Your Credit Score
The first step you’ll want to take when you apply for any form of credit or housing is to check your FICO score. You can obtain your free annual credit score from the three main bureaus on a weekly basis through the first quarter of 2021.
- Knowing your score will help you to judge just how good - or bad - your credit is. If your score is between 600 and 700, you may still qualify for many types of borrowing and home rentals
- Scores below 600 could make things more difficult while a FICO of 500 or less will put you firmly in the bad credit category
Avoid corporate landlords
Large property management companies tend to have a corporate approach to their rental application process including mandatory credit checks.
If your credit score is on the low side, you may encounter difficulties being approved by a large commercial landlord - but there are other options.
- A private owner who owns property in an area near your current home or work may be more likely to rent their home to you even if you have bad credit
- Be open and upfront with your prospective landlord regarding your income, credit score, and employment situation
- Search for rentals in the local newspaper, Craigslist, or using community social media groups to find local landlords
Demonstrate your income
A tenant with a reliable income and a proven track record of paying rent on time may be just as desirable as someone with a good credit score.
- If you’re concerned about your FICO numbers, you can make up for your bad credit by providing would-be landlords with several months of bank statements, paystubs, or a letter from your accountant verifying your income
- A letter of employment from a local business known to your landlord may also boost their confidence in you if you’re new to the area and don’t have extensive friends, neighbors, and colleagues
Ask For A Recommendation
If you enjoyed a positive relationship with your former landlord you can always ask them to write you a letter of recommendation when you move out.
- This document should state your full name, the address where you used to rent, and how long you lived there
- You’ll want to ask your previous landlord to state that the rent was normally paid on time - if this was the case - and that the property was left in good condition when you moved out
Get A Co-Signer
You may have heard of co-signers with regard to credit card and loan applications - but this strategy works equally well for prospective tenants.
- Your co-signer will assume joint responsibility for your rent payments. If you don’t pay on time, your landlord will be able to claim the full amount from the person who cosigned your agreement
- For this reason, it’s essential to approach someone who has excellent credit to cosign for you - and explain exactly what obligations they’ll be signing up for before you ask them to sign on the dotted line
Budget For A Bigger Security Deposit
If your bad credit score takes away from your desirability as a tenant, you can compensate for this by increasing the deposit you’re willing to pay.
- A typical rental deposit ranges from one to two months’ rent - but if you’re willing to offer three or more you may be able to secure the property of your choice
- Having a large cash deposit to offer your landlord will increase your credibility in their eyes and ease any concerns they may have about your ability to pay your rent each month
Having bad credit doesn’t mean you can’t rent a home. By following some of the strategies listed above you’ll inspire confidence in potential landlords and increase your chances of a successful rental application.