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How to Rent with Bad Credit

Landlords often require a certain credit score as a pre-requisite to letting a tenant move in. According to experts, a credit score of 650 is usually acceptable when entering into a rental agreement. Getting around this rule isn’t easy, as many landlords and rental management companies base potential tenants’ reliability on their previous track record, aka their credit score.

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If you have bad credit, you’ll need to get creative in order to convince a landlord to trust you. Here are some tips on how to rent with bad credit:

Find a co-signer

A co-signer is someone who co-signs on the lease, preferably with good credit. A co-signer with good credit adds credibility to your lease and gives the landlord security, as co-signers are legally obligated to cover the financial costs should you be unable to pay. If no one is willing to co-sign with you, co-signing companies are available to co-sign on your lease at the cost of a monthly fee.

Offer a Larger Deposit

This is something you can do to prove your financial reliability to your landlord. A higher deposit will make them feel more assuaged about having you as a tenant since you have already given them a decent amount of money up front. You can also give them several months of rent in advance — be wary of this however, as you never know what kind of landlord they will be. Giving them several months of rent ahead of time means less security for you.

Referral from Previous Landlord

A landlord referral holds credibility in the eyes of another landlord. Showing that you come concretely recommended will make your potential landlord feel more comfortable and possibly help sway their acceptance of you as a tenant. Having a positive landlord referral is actually suggested to be part of any application package, bad credit or not. It may not entirely win them over but it will definitely positively influence them.

Talk to them

Talk to them about your situation. Addressing your credit issues and explaining your score may improve the chances of you getting the apartment. Landlords know that most everyone’s economic circumstances have been unstable due to the economy and housing market in recent times. If you’re comfortable talking about your situation, try sincerely explaining to the landlord what went wrong.

Be the exception

Landlords may be willing to overlook a low score as long as your credit report shows consistency in bill payments. Many are also likely to work with people who have undergone a foreclosure but have otherwise good credit.

No credit check required

Credit checks are basically standard when it comes to corporate rentals. However, smaller landlords sometimes opt not to check for credit, as it is an added expense to deal with. It may take some hunting, but it is possible to find a decent apartment without being required to undergo a credit check.

Improve your credit

The first step in doing this is requesting a free copy of your credit report. The Fair Credit Report Act, FCRA, has made it mandatory for nationwide consumer reporting companies to give you a free credit report once every 12 months, should you request it. You can request this by phone, by mail, and online through Equifax, TransUnion, and Experian.     Looking at your credit report will help you ascertain the problem areas in your credit, and aid in your beginning to get back on track.

The amount of tenants and landlords is steadily increasing. According to the Rental Protection Agency there are 2,654 new renters every day and 544 new landlords. A new rental unit appears every 80 seconds! Don’t let bad credit stop you from applying for your own piece of the rental pie.

Photo Credit:  tray

Katherine Muniz
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