Renting an apartment? Here’s the credit score you need

About 43 million households in the U.S. are renters

Credit scores are important not only for prospective homebuyers, but also for people looking to rent an apartment.

Continue Reading Below

About 43 million households in the U.S. are renters.

According to Experian, the average FICO score in the second quarter of 2019 was 703, though scores tended to vary by age. Americans between the ages of 20 and 29 had the lowest average score, 662, compared to people aged 60 and over, whose scores averaged 749. The state with the highest average credit score as of the second quarter – 733 – was Minnesota.

The average FICO credit score reached 704 in 2018, which was an all-time high.

WHAT FACTORS DETERMINE YOUR CREDIT SCORE?

REFINANCING: WILL YOUR CREDIT SCORE TAKE A HIT?

As previously reported by FOX Business, a credit score is calculated based on five primary categories: payment history, amounts owed, length of credit history, credit mix and new credit.

Typically, the lower your credit score is, the less likely a landlord is to believe you will make your payments on time.

According to guidance from Realtor.com, a credit score above 700 will generally present no problems for an apartment seeker. However, challenges will likely begin to kick in if you have a credit score that is less than 680.

But the quality of the apartment you are seeking to rent could matter, too. A landlord in a less-luxurious building may be more willing to accept a score below 700.

For reference, a credit score below 650 is generally considered “poor.”

GET FOX BUSINESS ON THE GO BY CLICKING HERE

However, if you don’t have great credit, there are still ways you can rent an apartment. According to real estate website Trulia, you can use former landlords as a reference, point to a high salary as assurance you can pay, showcase your savings, offer to set up automatic payments, agree to pay more money upfront and use a co-signor.

According to data from Zillow, the median rent in the U.S. as of December 2019 was $1,600 per month.

CREDIT SCORE ON THE DECLINE? THIS COULD BE WHY