If you’ve ever filled out an apartment application, you’ve probably wondered, “Did I fill it out right? Did I give the right answers? When the landlord runs my credit, what are they really looking for?” Given that one in two landlords say that the results of a credit check are among the top three factors used when deciding whether to accept a tenant’s lease application (TransUnion), it’s important that you find out! Get the inside scoop on how landlords may check your credit, what they look for, and how you can position yourself as the best possible candidate to rent the apartment you want! Read the rest of this entry »
‘credit scores’ Tag
As part seven of our series about renting with credit, we’re looking at the way landlords handle renters and their credit. Once you have toured the property, talked with a leasing agent, and filled out the apartment’s rental application, the review process begins and your fate is in the landlord’s hands. So what happens after you hand over that apartment application? Here is a basic breakdown of what landlords need from a credit check.
Why do landlords require a credit check?
Landlords run credit checks because before accepting you as a renter, they need to know how reliable you will be as a tenant. Apartment landlords want to be sure you will consistently and punctually pay your rent and other bills, and that you will be able to pay your deposits. Landlords also want to know if you have been a reliable renter in the past, which is something your rental history will reveal.
What do landlords look for in a credit check?
When landlords run a credit check, they are looking for a variety of things. Because your credit report is basically a summation of your financial history, they are looking for inconsistencies or irresponsible behavior. Examples include late bill payments on everything from monthly rent to student loans, conviction of a crime, eviction, involvement in any type of lawsuit, and a credit history. They are also looking at your rental history to determine what kind of renter you were at your previous home.
How do landlords run a check credit?
To check your credit, landlords will work with a credit reporting agency or a tenant screening service. They will need your name, current address, social security number or individual taxpayer identification number, and your authorization to run a credit check. All of these are usually required on the apartment’s application. In many cases, landlords are legally allowed to charge you for the credit check. The request for a credit report will issue a hard inquiry on your report, which might have a negative effect on your credit score, so you may want to provide your potential landlord with a copy of your report along with your apartment’s application. However, note that in most cases the landlord is not required by law to accept it.
For more tips about renting apartments and credit, be sure to check out the rest of our series about credit, including Apartment Credit Scores 101, 5 Ways to Improve Your Credit Score, and How to Rent an Apartment with Bad Credit. Have a question about renting apartments and credit that wasn’t answered in our series? Find AparmentSearch.com on Twitter and Facebook and ask us.
An apartment search is a tricky task with the albatross of bad credit hanging around your neck. But take heart, apartment-searcher: your credit score is not beyond repair. Whether you’re in the throes of an apartment search or you just want to get your credit score back on the right track, there’s hope for you yet.
The truth is that the best thing you can do for your credit score (and your apartment search) is establish good habits when it comes to keeping track of your finances. If that sounds daunting, don’t worry—let’s break it down. Here are 5 ways to get a better credit score and get on with your apartment search. Read the rest of this entry »
As your long and possibly arduous apartment search comes to a close, it comes time to submit your applications and begin the wait for approval. One critical element of the rental application is your rental history, which could mean good or bad things for you. Your rental history is significant to your potential new landlords, as it is essentially a record of your prior rental experiences. Landlords will want to know what kind of tenant you were in the past, so they can minimize the risk of renting to someone with, for example, a history of consistently being late on rent. While late rent payments do not directly affect your credit score, landlords requesting credit checks may also request data on your rental history from those credit agencies. Although late rent payments don’t affect your credit score the way a late mortgage payment would, late rent payments in your rental history will raise a red flag to prospective landlords.
What hurts your rental history?
When requesting a rental history for a potential renter, landlords will be provided with all kinds of information about you. Among the negative things they could learn about you are events such as bounced checks or late rent payments. Even worse, unpaid housing debts, eviction proceedings, and breaches of lease terms can also be reported to credit agencies for distribution to landlords. Financial irresponsibility aside, rental histories may also report on complaints about you or significant damages to your past apartments. All of these are huge red flags to potential landlords and probably weigh heavily in their decision to rent to you. Whether you’ve squared away your debts and kept your apartment in good shape are also factors in getting your deposit back.
What helps your rental history?
On the flip side, maintaining a good rental history and credit score is the best way to show potential landlords that you’re a good fit and a low-risk renter. Being a model tenant isn’t hard – so long as you pay rent on time, be a considerate neighbor, and take good care of your apartment. With no judgments or evictions against you, landlords can feel good about renting to you – possibly even at a lower deposit amount.
Trying to find an apartment is hard enough without the burden of bad credit slowing you down. Because landlords will, more often than not, run a credit check on potential renters, your credit score may play a big part in whether or not your application is accepted.
So what do you do if your credit isn’t stellar? Can you still find an apartment that will rent to you? Don’t worry. It is possible to rent with bad credit. Here is a step-by-step guide to finding and renting an apartment despite a less-than-perfect credit score.
Step 1: Get all the facts.
Before you even start to try to find an apartment, find out exactly what your credit score is. Order a free copy of your credit report from the 3 major credit bureaus: Experian, Equifax, and TransUnion. Once you know your score, you’ll be able to narrow down your options during your apartment search and find an apartment more easily.
Step 2: Work with landlords one-on-one.
When trying to find an apartment, try working directly with the property owner rather than through a larger landlord. Discussing your situation one-on-one with a landlord or leasing agent can really help.
Step 3: Be honest about your situation.
Even though it may be the last thing you want to do, tell landlord or leasing agent right away about the state of your credit. Honesty, in this situation, can actually be the best policy. Be clear about the reasons for your poor credit, and outline the things you are doing to repair your credit.
Step 4: Provide the landlord with your credit score up front.
Because having your credit score pulled multiple times by a variety of landlords during your apartment search can further lower your credit score, consider including a copy of your credit report yourself with your application.
Step 5: Prove your reliability.
When talking with the landlord about your situation, offer proof of your responsibility. Part of the reason landlords run a credit check is to determine whether or not you will be a reliable, responsible renter. Provide letters of recommendation from your employer and/or previous landlords, and ask the landlord what they require from renters for proof of stability.
Step 6: Get a co-signer.
For renters who have poor credit or a limited credit history, try opting for a cosigner. This solution is a good one if you have a relative or friend willing to vouch for your credibility.
Step 7: Offer to pay in advance.
This solution is a little less than desirable, since it might take a considerable chunk of cash. However, it is a good option if you have the means, especially if you find an apartment that you really love. If you are able, offer to pay the first 3-6 months’ rent in advance or offer to pay a larger security deposit. Some apartments are more flexible than others, and if you can find an apartment that is willing to work with you, you may be more likely to secure a lease, even with bad credit.
For more tools to learn about your credit score as a renter, you can visit our Moving Center page. For more in our series on how to find an apartment and navigate your credit score, check out last week’s post, Apartment Credit Scores 101; and stay tuned for next week’s post about how to improve your credit!
If you have ever tried to rent an apartment, lease a car, get a loan, or buy a home, you know the importance of having a good credit score. In fact, a lot of renters are concerned about how their credit score can affect their ability to find an apartment.
This month we’ll be focusing on what you need to know about renting with credit—good, bad, or in-between.
So let’s start with the basics, shall we?
What is a good credit score? What is a bad credit score?
Credit scores fall in a range between 300 and 850, with 850 being a perfect credit score. If your credit score is below 620, you are considered high risk, which may reflect negatively on you when you are trying to find an apartment. Your credit score is shaped by your financial history, including your punctuality when paying bills, the amount of debt you have accrued, the length of time you have been employed, and much more.
Why do apartments want to know your credit score?
Your credit score indicates your trustworthiness as a renter. Because your potential landlord will be expecting you to pay a large sum (in the form of rent and utilities) every month, they want to know that you’ll be a reliable renter. That’s why landlords may run credit checks to determine how much debt you have and then compare that figure to your current income. They can also use your credit report data to see where you have lived and inquire about your rental history and reliability.
How can I find out my credit score?
There are many services that offer to monitor your credit score and send you frequent credit reports. These services can be useful, especially if you are in the process of attempting to correct bad credit. However, if you don’t need regular updates on your credit, try this: Did you know that you can order one free copy of your credit report per year from each of the 3 credit bureaus? Use these reports as a starting point when trying to find an apartment to see what your potential landlords will see.
If you are trying to find an apartment but feel weighted down by a bad credit score, stay tuned! Later we’ll talk about how to find an apartment with less-than-perfect credit, what you can do to improve your credit, and more.
Have questions of your own about credit scores or how to find an apartment? Find ApartmentSearch.com on Facebook or ask us a question on Twitter (@ApartmentSearch). We’ll do our best to answer it here!
Credit Scores Affect Your Life
Your credit score might be one of the most important numbers in your life. Especially if you’re thinking about buying a home, leasing a car, getting a loan, or even renting a college apartment. To qualify for these things, companies will want to take a look at your credit score.
But why is this number important? Well, a low credit score can keep you from getting the things you want and need. If you don’t meet the requirements of a company, they might reject you when you apply for something. The reason for this is that companies want to be absolutely sure that you will be able to pay back your loan, pay off your car or home, or pay your rent on time. It’s easy to understand if you put yourself in their shoes — if you were letting someone borrow something valuable of yours, would you loan it out to just anyone? Probably not. You’d want to give it out to someone whose trust and responsibility had been proven.
Like apartment ratings for our industry, credit scores tell someone, if you have a high credit score, that you have proven yourself as a borrower. And if you have a low credit score, it tells someone you might have made some mistakes. Things that can lower your credit score are missing credit card payments, paying bills late, or opening too many credit cards, for example. The best way to have a high credit score, according to industry experts, is to pay your bills on time.
Credit Score Details
Credit scores range from 300 to 850, with the best and highest credit report score being 850. If you have a credit score lower than 620, you are labeled high risk and therefore might have a hard time getting loans or approved for credit accounts.
Credit Score Tips
But whether your credit score is low or high, it’s important to keep tabs on it. Every year, consumers can order one free copy of their credit report from each of the three credit bureaus. From this, you’ll be able to see how many accounts you have open, inquiries made to your credit and more.
It’s important to look at this credit report to be absolutely sure no one has opened any accounts in your name without you knowing. You can also keep an eye out for information that is not supposed to be included on your credit report. For example, a family member with the same last name as yours might have some of his or her information on your credit report. These kinds of mistakes could negatively influence your credit score, so keeping an eye out for them is necessary.
Daily Credit Scores
There are also a number of services that monitor your credit score more closely, including some companies that will run daily credit scores for you. For most consumers, a daily credit score service is overkill, but if you’re in an ongoing battle to remove a lot of black marks from your credit score report, you may find such a service useful to see what kind of progress you’re making. The credit agencies try to maintain accurate information, but change takes time and each modification to your credit score report requires proper documentation to prove that you’re correcting actual mistakes.
Get a Higher Credit Score
How do you get a higher credit score?
- Pay your bills on time.
- Don’t overextend yourself – your credit score reflects how well you stay within your means. If you’re barely making ends meet, your credit score will be low, even if you’re not missing payments.
- If you’ve defaulted on any old debts, like a college loan or a renters insurance bill, make sure to contact the lender and set up a payment arrangement to clean up the debt.
- Get a copy of your credit report from all three credit bureaus and contact them if you find any mistakes.
- If you have trouble keeping to a budget, help your credit score out by cutting inessential regular expenses. Drop premium cable television for your apartment. Find a cheaper cellphone plan and use a landline for longer calls. Don’t eat out as often. Take the bus or bike to cut your gas bill. Your credit score will thank you!
- If necessary, sign up with a service that sends you your credit score on a regular basis – even daily credit scores in extreme cases.
- If you know you’re going to miss a payment, contact that lender before the problem hits their records and let them know what’s going on. Try to set up a payment plan so you don’t show up as a credit score offender.
- If you’re turned down for credit, the law allows you to request a free credit report even if you’ve already received a free report for that year. Request the additional credit score report and find out why you were turned down. If it’s a credit score mistake or a forgotten debt, clean it up.
Taking these steps should help you get a higher credit score… and getting a higher credit score will forestall any ugly misunderstandings the next time you are buying something hefty or working on finding an apartment.
Take care of your credit score, and it’ll help take care of you! Happy borrowing!