Renting with Bad Credit? Here’s How to Land Your Dream Home Anyway!

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Having a credit card can be beneficial, but it also comes with a great deal of responsibilities. Late payments impact your credit score as does defaulting on debts or loans. Bad credit means having a score between 300 and 629. Renting an apartment with bad credit is a difficult task, but not impossible. 

If you have bad credit, it becomes difficult to get a rental property as landlords may be reluctant to lease to you if they fear you won’t pay. But it also depends on how low your credit score is, as some landlords find values ​​between 580 and 630 acceptable. Fortunately, even if you have bad credit, renting is still possible. 

1. Know Your Credit Score 

The best way to fix something is to admit it needs fixing in the first place. Whether you need to work on your credit depends on your credit rating. You can check your credit report for free at any credit bureau and decide what to do to improve it. 

2. Own Up to Your Bad Credit  

Most property managers will check your credit as part of the application process. Even if this isn’t the case, it’s best to be honest about your creditworthiness when speaking to your landlord. Not only does this allow you to explain yourself, but it can also make you more responsible by acknowledging your mistakes. Also describe how you plan to show the owner that you will never make the same mistakes again. 

3. Get Someone to “Vouch” for you 

There are many reasons why your credit score may have declined, whether it’s due to an adverse situation such as divorce, job loss or medical bills, or simply due to financial irresponsibility at some point in your life. Asking a landlord, bank or previous employer for a recommendation can go a long way in securing a rental with bad credit. 

4. Have a Co-signer or Get a Roommate 

Getting a co-signer or linking up with a roommate with good credit is the most likely way to get a home if your credit is bad. If they have a good credit history, the landlord will likely make a decision based on their creditworthiness. However, you are still responsible for your portion of the rent, whether someone else signs up as your guarantor or someone else lives with you and pays the rent. Remember to always make your payments on time to build your financial credibility. 

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5. Show a Stable, Demonstrable Income 

Although your past financial situation may have resulted in bad credit, having a stable income now can help you get your credit history in order to secure your lease. A monthly income of at least three times the monthly rent and a stable income can be a good indicator for the landlord that you can make the payments. Use our rental calculator to find out how much you can afford based on your income. Plus, set up automatic payments or use Rent RX services so your landlord can withdraw rent from your bank account each month. Rent RX makes sure you pay your rent on-time and it reports it immediately to the credit bureaus so that your score can improve faster.  

6. Pay More Upfront 

Renting an apartment with a bad credit rating can also come with higher upfront, out of pocket costs. Typically, a larger deposit that covers 2-3 months rent. This gives the landlord certain security in the event of a delay in payment. Poor credit can definitely cause trouble when you want to rent an apartment, take out a student loan, or do anything where someone is relying on your financial responsibility. However, there are ways to recover from past mistakes and improve your credit score. 

How to Deal with Bad Credit 

While no credit is better than bad credit, improving your credit score is possible, but it takes time. In fact, your credit history stays on your credit report for 7 years. 

The first step to improving your credit score is to get caught up on any late payments. If possible, it is extremely important to pay them off in full to avoid additional interest fees, further damaging your credit score. If you have loans in collections, you should work on reducing the amount you owe so your debt to credit ratio is lower. In time you can start paying off the entire debt that is in collection. 

Credit and loans are designed to help us in everyday life, especially when we are making more important and expensive decisions. Being responsible for their repayment is important to be able to continue to benefit from this financial support in the future, whether we are leasing an apartment, buying a car or even a house.