Good credit isn’t just a necessity for homeowners. Many landlords and rental management companies also require sufficient credit scores from tenants before allowing them to move in.
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“When renting an apartment it’s the same as when you are trying to purchase a car or a home. A property manager and landlord will check your credit,” says Chris Brown, vice president of products at Apartments.com.
According to real estate experts, a credit score of 650 is considered suitable to enter into a rental agreement. But that doesn’t mean renters with poor credit scores are out of luck, there are steps to take to get a foot into the door.
Get a Co-Signer
Whether it’s a property management company, a home owner or a small rental agency, all of them are looking for security when renting out their properties and they rely on credit scores to protect against deadbeats.
If your credit score is lacking, Ron Denhaan, a real estate agent at Realty One Group, says the most effective way to secure a rental is to have a co-signer good with strong credit act.
“It’s the most effective because it gives the landlord security because they have a fall back person if the rent doesn’t get paid,” he says.
If you can’t find a friend or relative willing to sign a lease there are co-signing companies that will do it for a monthly fee.
Explain Your Situation
Times are tough and it’s been an unfavorable housing and labor market for the past few years and landlords haven’t been exempt from the hardships. If your credit score took a hit, experts suggest explaining your situation to landlords.
“Don’t expect to sneak by,” says Brown. “You have to address the issues upfront.”
Be Willing to Make Concessions
Experts say landlords may be willing to look over a few blemishes on a credit report as long as there is no track record of not paying bills and you are willing to make a few concessions.
“They may ask for a higher deposit or for several months of rent in advance,” says Denhaan.
He adds that landlords are willing to work with people that are otherwise credit worthy but underwent a foreclosure.
“People with poor credit have to be willing to work with the landlord. The worst thing in the world is someone with poor credit that wants a discount on the rent and security deposit,” says Denhaan.
Work to Improve Your Score
Renters should always be working on improving their score to become stellar applicants so they can work out the best deals.
That means paying any unpaid balances on credit cards, previous landlords and any other outstanding bills. Taking the steps to repair debts will be reflected in your credit and will help secure a rental. “Being proactive is really the best thing you can do,” says Brown.