Does Credit Really Matter When Renting?

by Oct 2, 2022Blog

Your financial status is an essential part of your ability to rent an apartment. Landlords and property managers need assurance you can pay your rent, so they often ask for proof of income. This can be tax forms or recent pay stubs.

They will also check your credit score as part of the screening process. Your credit score is an indicator of your capability to manage money, and landlords may be hesitant to rent to applicants with a low credit score.

Keep reading to learn more about how credit affects your rental application and how to improve it.

What Credit Score Do I Need to Rent?

Each landlord and property manager has different standards, but most will look for credit scores above 600 or in the “Fair” range.

For reference, credit scores usually fall within these categories:

  • Poor: 300-579
  • Fair: 580-669
  • Good: 670-739
  • Very Good: 740-799
  • Exceptional: 800-850

Property managers will expect higher credit scores if you are applying for a high-end apartment or house rental. This is also true if you are looking to rent in locations with high demand.

Even if you have a low credit score, it doesn’t mean you are immediately disqualified from renting an apartment. Some landlords may look at your credit report, which may showcase your payment history in a better light. It can show if you consistently missed payments or were a victim of identity theft.

Here are a few other methods to prove to landlords and property managers that you are a responsible renter:

  • Proof of rental payments: Some credit bureaus may include rental history on credit reports. You could also show proof of payment by providing bank statements or check images of on-time rental payments.
  • Letter of recommendation: Past landlords may be willing to write you a letter of recommendation about how you were a great tenant and paid your rent on time.
  • Get a cosigner: Just like cosigning a loan, you can also get a person to cosign your lease. This will involve the cosigner providing proof of income, and they will be responsible for paying rent if you don’t pay it.
  • Proof of savings: Besides proof of income like paystubs, you may also want to show that you have significant savings.
  • Pay more upfront: Usually, a landlord will ask for a security deposit and the first month’s rent. You could also offer to pay the last month’s rent or a higher security deposit.
  • Explain negative parts of your credit report: You could discuss your situation further with the landlord or property manager. Explain the events that caused a low credit score and what you’re doing to improve it.

What if I Don’t Have a Credit Score?

When you’ve just graduated from college, you may not have any credit score to share with landlords. At this point, you must start building a credit score. Not only will this help you rent an apartment, but it will also help you when you decide to get loans for a house, car, or business.

If you don’t have a credit score, here are a few tips to get started:

  • Apply for a credit card
  • Make payments on time
  • Review credit score and report for errors

For more information, check out our post on how to begin building credit.

Need Help from Credit Experts?

Improve Credit offers credit repair services for individuals to repair and build their credit scores. We also offer financial counseling, so you can have a personalized plan to save money and build credit. Get in touch with our experienced team to get a free analysis.