A question that I've been asked by prospective tenants is, "Can I rent if I have bad credit?" Some property owners will tell you absolutely not, but others will consider it. With some, the key to finding a rental if your credit is less than perfect is being honest and up front. Is there a reason that your credit is bad? If you just don't like to pay your bills, that's not a good reason! However, if you have bad credit as the result of a break-up following a domestic violence incident with your abusive partner, some landlords may be willing to work with you. Here are some of the things you can do - if you haven't, you know what you need to work on:
Know your credit score, and know what's on your credit report. There are three main credit bureaus: Equifax, Experian, & TransUnion. By law, you are entitled to receive a free copy of your credit report each year from AnnualCreditReport.Com - it does not include your credit score but it does tell you what others will see if they run your credit. There are other sites out there like Credit Karma that are free to use - in fact, Credit Karma reports that checking your credit score through them will not hurt your credit. If you see errors on any of the reports, dispute them so that you can get problems resolved. Do this as soon as possible as the process can take time.
If there is a legitimate reason why your credit score is low, get letters of recommendation to help an owner feel more confident in renting to you. This might be from a previous landlord who would be able to say that you paid your rent on time and were a good tenant. If you have been working for a long time in one place, you may want to see about getting a letter from the company explaining that you are a good long-term employee. Have the letters ready in case you need them, but don't hand them out unless you feel it's necessary to make them feel more comfortable with you after you have explained your situation.
Make sure your income is high enough to cover the rental. Many property managers and owners look to see if you have three times the monthly rent in gross income. Here's how you find out what you can afford: look at your most recent tax return to see your annual gross income. If there are other income earners in the household (like your spouse, partner, or roommate), get their annual gross income from their most recent tax return and add it to yours. Once you have the total household annual gross income, divide that number by 36. That is the most you should plan on paying for rent each month. Here's an example: you earned $22,000 last year and your spouse earned $20,000. That's a total household annual gross income of $22,000 + $20,000 = $42,000. Take that number and divide by 36 to get the maximum you should spend on rent per month, so $42,000 / 36 = $1,166.67 per month.
Be ready to pay more money up front in order to get a place. Some landlords may require you to pay a higher security deposit just in case you don't make timely payments.
See if you can get someone that would be willing to co-sign on a lease with you. Realize that if you don't pay your rent, that person is legally responsible for the amount you owe. For this reason, many people are unwilling to co-sign for others.
Tell your prospective landlord that you are willing to pay them monthly via direct deposit from your bank account. This might make a landlord feel better about renting to you.
Consider offering to pay your rent a certain amount of time in advance (for example, you might agree to always pay your rent two months before it's due - so in addition to your security deposit and first month's rent to move in, you would need two additional months rent as well).
If your score really is bad and it should be, you may be best off trying to find rentals where the owners don't do credit checks. As an owner, I'm surprised that some owners don't do this.
My best piece of advice for you is this - be honest. If you have bad credit, share that with your prospective landlord. If they run a credit check as part of the approval process, they're going to find out anyway. If you discuss it before filling out an application and paying the application fee, you may be able to save yourself money. If the landlord says they absolutely require a certain credit score in order to consider you as a renter and you know you don't have it, why pay for an application if you know you don't qualify? Save yourself the money and only apply if you have a decent feeling that you'll be approved based on your discussion with the landlord.
Do you have any advice you can share with others about how you were able to secure a rental with poor credit? I'm sure they'd appreciate your suggestions.
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