5 Tips for Renting a Home When Your Credit Is Poor

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Happy couple buying a home in a new city
Monkey Business Images / Shutterstock.com

If you’ve ever found yourself in search of a new place to live and your credit is less than perfect, you probably know it’s not easy.

It may be especially difficult right now, because in many U.S. cities, rental properties are in short supply, and demand is high. A tight market generally means the qualification criteria will be more stringent to weed out applicants.

But there are ways to persuade landlords to cut you some slack — if you know how to approach them.

First of all, think of it from the landlord’s perspective. If you have been late on utility bills, possess delinquent accounts or have faced wage garnishments in the past, they will be right to wonder if you will pay your rent on time.

Nonetheless, bad credit doesn’t have to be a deal breaker. Here are a few tips that will help you pass inspection:

  • Be honest. 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, see if you can find someone with a strong credit history and verifiable income who is willing to co-sign the lease agreement.
  • Search for a landlord who doesn’t run credit checks. It may take more legwork, and you might not get the perfect apartment or house to rent, but it could afford you the chance to build up a strong history of timely payment so that the next time won’t be so difficult.

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 salesman 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, you may need to spend some time improving your credit and then take another run at the ideal rental home.

For tips on how to raise your credit score, watch the video below, and then be sure to check out our Solutions Center section on credit restoration.

Do you have an experience convincing a landlord that you are a good bet — or failing to win them over? Share your experience in the comments below or on our Facebook page.

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