When I was 22, I moved to San Francisco and began searching for my first apartment. To my surprise, every rental application requested my credit score. I thought my proof of income would be enough to show that I could afford monthly rent, but amongst a sea of other seemingly qualified applicants, I learned that many landlords use credit scores as an important indicator of financial reliability in order to make their final decision. One study found that 43% of landlords used credit checks when vetting applicants and almost half considered a credit report to be one of the top three factors in making a decision. Who knew?! Well, at that point in my life, I certainly did not.
If I wanted to rent an apartment in a competitive housing market like San Francisco without a government housing voucher like Section 8, a good credit score had the potential to dramatically help me in getting the best bang for my buck. After some googling and interrogating my family and friends, I was able to piece together a plan on how to acquire and manage a good credit score. However, I recently checked out LendUp’s quick 2-4 minute educational videos one day at work and realized I could have saved myself loads of time by watching these instead -- and I’m not just saying that because I work at LendUp. They were short, clear, and super helpful.
If you don’t have a competitive credit score or don’t have time to build one before renting an apartment, here are a few alternative ways you could consider using to demonstrate your financial reliability to a landlord:
- Be upfront. As the real estate site Trulia shares in this blog post, “sometimes, bad credit isn’t a reflection of bad money management. You may have lost your job, suffered from medical problems, or experienced another financial setback that was out of your control. If this is the case, be upfront about it — before the landlord even runs your credit check.”
- Find a cosigner. I had a number of friends who were unable to provide a good credit score on their leasing applications. However, they found success in convincing someone who had good credit to cosign a lease with them. This pretty much means that if you, the tenant, are unable to pay your rent on time for whatever reason, your cosigner will be legally responsible for making the timely payment.
- Offer to pay a larger security deposit. I have a friend who recently subleased his apartment, and although the new renter was unable to provide a good credit score, he was able to offer a larger deposit upfront. Not everyone may have enough savings to afford this, but if you do, it may provide some added insurance to the person leasing the apartment to you.
Some landlords only consider applicants with credit scores above 700, some are lenient about blemishes in credit history, while some don’t care about credit scores at all. Every case is different. Nevertheless, I encourage you to learn what it takes to become a strong rental applicant, and perhaps even take the steps to be armed and ready with a strong credit score. Because if you do, you might not be as surprised when filling out rental applications as I was.
About Pooja -- Pooja Reddy is a software engineer at LendUp. She likes dry humor, horror films, and dinner parties. She wants to Make Kanye Great Again.
Disclaimer: LendUp is not providing financial, legal or tax advice. If you need or want such advice, please consult a qualified advisor.