5 Tips for Renting a Home When Your Credit Is Poor

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If you’ve recently found yourself in search of a new place to live and your credit is less than perfect, you may have encountered some difficulty.

As with most things in life, how much difficulty you face will depend on your specific set of circumstances.

Let’s say you’re shopping when the demand is exorbitantly high for rental properties in a particular area. Chances are, the qualification criteria will be more stringent to weed out applicants.

But if a property has been dormant for months and no one seems to show much interest, the landlord may be willing to cut you some slack, especially if they have other properties to depend on for a source of revenue. It all just depends on the given circumstances at the time and whether or not the property manager is willing to take a risk.

Key factors landlords consider when evaluating applicants

The screening process varies, but poor payment history is a huge red flag for landlords. If you are consistently late on utility bills, possess delinquent accounts or have faced wage garnishments in the past, chances are that you may have a difficult time getting approved. If you have a hard time keeping the lights on, what are the chances that you’ll actually make timely, if any, rent payments?

On the contrary, items such as excessive student loans, credit card debt and medical bills may be overlooked as long as they do not pose as much of a threat.

Tips to help you get approved with poor credit

Having bad credit doesn’t necessarily prevent you from renting the home or apartment of your dreams. Here are a few tips to help you get over the hurdles you may encounter:

  • Be honest. Honesty is the best policy. If you know that the property manager will perform a credit check, beat him to the punch and lay everything on the table. When doing so, present letters of reference to prove your case from those you have dealt with in the past, such as landlords and employers. Also, direct the evaluator to the notes in your credit file to strengthen your case.
  • Offer to prepay rent. Still getting the side eye? Assuming you have a substantial amount of cash on hand, offer to beef up the security deposit or even prepay rent for the first and last month to indicate that you are serious about being a responsible tenant. You may also want to see if they are willing to grant you an approval if you enroll in automatic withdrawal.
  • Sign a shorter lease. Inquire about shorter lease options in order to gain the respect and trust of the landlord. This may cost you more initially, but they may be willing to lock you into a long-term lease once you have shown them that you will be a tenant who makes timely payments.
  • Find a co-signer. If all else fails, find someone with a strong credit history and verifiable income who is willing to co-sign the lease agreement on your behalf.
  • Search for a landlord who doesn’t run credit checks. This may take a bit of legwork, but it will definitely be worth it in the end. After all, your objective is to get approved while letting your poor credit fly under the radar.

The application process

When going through the approval process, remember that this is a negotiation and should be treated as such. Think about the car-buying process: If you blurt out a number, you may be stuck with it, even if the salesmen had a lower figure in mind. The same principle applies here. Don’t jump the gun and do the talking first. Instead, see what they are willing to do for you.

If you still can’t get approved for a rental, work hard to improve your credit and start the search all over again when the time is right.

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