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It's no surprise that your credit is checked when you want to borrow money with a credit card or loan. After all, the lender needs to know if you really have the ability and track record to repay them. But your credit is often checked in other situations, including when applying for jobs, opening utility accounts and even when trying to rent an apartment.
Your credit report shows your debt load as well as whether you tend to make payments late or on time. Landlords often run credit checks to help them determine the likelihood that prospective tenants will pay rent on time. This might make apartment-hunting more challenging for people with poor credit or no credit, but it can be possible to find apartments without required credit checks.
Do All Rentals Require a Credit Check?
Most apartments do require credit checks for potential tenants, but not all do. While some might have strict credit score requirements, others may have flexibility, especially if other aspects of your finances are solid.
Some landlords are more flexible than others, however, so seeking out properties without required credit checks could be a smart move if your credit needs improvement. But don't completely shy away from places that do check credit. While your credit score may not be as high as a landlord would prefer, you may still be able to get in the door by using other strategies.
How to Rent an Apartment With No Credit Check
If you haven't yet established credit, or your credit score is in bad shape, finding a place to lease isn't necessarily out of reach. Try these tips to land a no credit check apartment, or at least one where more is considered than credit history.
Look for Individual Landlords
Traditional apartment complexes are usually run by property management companies, and they often have strict requirements for renters. But there are also rentals that individuals manage, including as condos, duplexes and even single-family homes, where rental requirements may be more relaxed.
If you can find property a single landlord owns and manages, they'll likely have more flexibility about credit and other criteria than a large apartment company. You could find owner-managed listings online on large rental aggregation sites, but you can also drive around looking for "for rent" signs on smaller properties. Just remain vigilant for potential signs of rental scams.
Sweeten the Deal
Most landlords and management companies require new tenants to pay an upfront security deposit. If you have poor credit, they may request a higher security deposit to minimize their financial risk. Here are a few ways you may be able to sweeten the deal and improve your chances:
- Offer a higher deposit. If you can afford to do so, you may want to offer to pay more than the required deposit in hopes of overriding credit concerns.
- Offer to pay a few months' rent in advance. This might help the landlord feel more comfortable accepting your application since they'll have a few months of extra security should you default on rent.
- Offer to move in right away. Other potential applicants might not be able to do this, so this could give you an advantage.
You may have more luck with these tactics with smaller operations or individual landlords rather than apartment complexes, but it never hurts to ask.
Prove Yourself
A landlord's biggest concern when approving someone for an apartment is whether they'll pay rent on time. In lieu of a healthy credit score, present other evidence to build trust that you're good for it.
One tactic is to offer character reference letters highlighting qualities landlords look for, such as financial responsibility, timeliness, cleanliness, honesty and so on. Consider asking former landlords, employers, colleagues or roommates if they'll vouch for you.
Another way to establish credibility with potential landlords is offering proof of income, which could be via tax forms, pay stubs or an employer letter. You may already be required to do this, but if not, it could help a landlord look past imperfect credit.
Landlords typically want to know a renter's gross monthly income is at least three to four times the monthly rent. Some might use annual figures, requiring your total income to equal around 40 times the monthly rent, or no more than 30% of your annual salary.
This income range will vary by location, with more competitive markets sometimes requiring higher income.
Find a Cosigner/Guarantor
Another way to obtain a rental property without a credit check is to ask a family member or close friend with good credit to cosign for you. They won't live with you; this person applies for the apartment with you and signs the lease, serving as a guarantor who's obligated to cover the rent should you default on your payments.
Cosigners typically have to have good credit and might also need to show proof of their income. Before pursuing this route, consider how this could impact your relationship should you fail to make rent payments and they become financially responsible.
You could also get a roommate who will sign a lease and live with you. If they have better credit than you, it could sway a hesitant landlord.
Consider the Housing Choice Voucher Program
If you have both a poor credit score and very low income, you may be eligible for the housing choice voucher program (HCV). Formerly known as Section 8, this federal initiative subsidizes housing costs for low-income, elderly and disabled Americans.
HCV eligibility is determined by local public housing authorities and is based on factors such as household income and family size. If you're eligible, the government provides vouchers that reduce how much rent you owe.
Landlords have to opt in to this program, and those who accept HCV tenants still have the discretion to use their own rent criteria, which could include your credit history. But landlords that participate may have more flexibility than others. If you think you may be eligible for HCV, contact your local public housing authority.
How to Improve Your Credit
Solid credit scores can open a lot of doors, and the better your score, the more opportunities you could have. It can take time to improve or build credit, but here are some ways to potentially increase your score.
- Open a secured credit card. If you have little or no credit (also called having a thin file), this is an easier way to jump-start your credit history and start improving your score. Secured cards work like normal credit cards, except they require a security deposit—which is often equal to the amount of your credit limit—when you sign up. After you've consistently made on-time payments for a stretch, you'll typically be able to switch to a regular credit card.
- Make timely payments. Payment history is the most important factor in calculating your credit scores, and even one late or missed payment on debt can have a negative impact on your scores.
- Don't carry too much debt. The amount of debt you owe is the second most important aspect of your credit scores, and credit scoring models place special importance on your credit utilization ratio. This ratio shows how much available credit you're using on revolving accounts (mainly credit cards) and is calculated by dividing your total balances by your total credit limits. It is recommended to keep your credit utilization ratio around 30%; less than 10% is ideal.
Frequently Asked Questions
Yes, you can find a place to rent with no credit, though it can be challenging. Larger apartment complexes and property management companies typically have stricter credit requirements. Those with no credit or poor credit may have better luck with an individual landlord who can be more flexible, or by utilizing the HCV program.
When landlords screen prospective renters, they often run credit checks to determine the likelihood that the renter will pay rent as agreed and on time. Some small slip-ups or credit card balances on your credit report may be fine. But consistent late payments or hefty debt balances, along with past loan defaults, bankruptcies, foreclosures, charge-offs or repossessions can be red flags and cause them to reject an application.
The time required to raise your credit score can vary from months to years depending on your goals and what's currently weighing it down. Missed late payments, as well as other negative marks such as loan defaults, can stay on your report and hurt your score for up to seven years. Since payment history is the biggest factor in your credit score, make paying on time your priority for the greatest impact.
Build Better Credit Faster
Another way to expedite improving your credit score and improve your chances of an approved rental application is by using Experian Boost®ø. This free feature allows you to add items to your credit file that normally don't count toward it, such as your payments for utilities, streaming services and mobile phones.
