No one wishes to have a lousy credit score to their name now, do they? Of course not! Why? Because a bad credit score is a deal-breaker for many significant financial commitments in our lives, such as buying a car or house, or even making a monthly rental payment! Landlords, property managers, or property companies incorporate a credit check as a critical part of their tenant screening process to determine the financial worthiness of a potential tenant. Should you have a below-average credit score, it puts your worth as a tenant in jeopardy though you might have a squeaky clean rental history, credible references, or even a stable income.
Having said that, let us also add that having a bad credit score doesn’t close all doors to getting a rental house or room that fits your requirements. It just means that you need to put in a little more effort to improve your score or find alternatives that will send your rental application to the top of the pile!
Let’s look at 10 tips that will help you rent you the house you want despite a low score:
1. Browse your credit reports well
Before you even begin the house-hunting process, request online credit reports from Experian, Equifax, and TransUnion. You could use any one, but since your landlord might be asking for your report from any one of the agencies for a credit check, you may want to be more thorough and access all three. Take the time to browse them carefully and look for discrepancies.
Access annualcreditreport.com to get a free yearly credit report copy from all three bureaus. For any issues contact the agencies, raise a dispute, and have them sort out the errors. Analyze the reports in detail to determine possible reasons for a poor score, whether it’s due to missed payments or pending debts. If there’s little to no negative information on your reports, it means good news, and you’re eligible for consideration by prospective landlords.
2. Find landlords who don’t care about credit
If you’re lucky, you might come across landlords who don’t give much importance to credit scores or even conduct them during the tenant screening process. Interestingly, it’s the property management companies owning apartment complexes that are very particular about credit scores on every rental application, and about having a perfect credit score to be considered eligible as a tenant. On the other hand, individual property owners are likely to be more flexible in this regard, so direct your search process toward finding them.
Individual landlords are willing to go the extra mile and consider a prospective tenant with a low credit score but an otherwise spotless rental history and steady income. In fact, the statistics in a TransUnion survey reveal that 57 percent of landlords don’t get into credit checks at all.
To find rental property posted by individual landlords, you could use a number of options. Craigslist, even with its reputation for rental scams, is still widely searched for rental properties owned by property companies and individuals. They may have information on specific rentals that don’t require credit checks, so you could check it out, although given the number of parties posting their rentals, there’s a lot of information to go through. Many people who own property also use the services of real estate agents to rent out their property, so find one and seek their help in finding a rental house or room. Clarify with them whether they use credit checks to shortlist a potential tenant.
Whichever locale you choose to find your rental home or room, take a walk or drive around looking for the “For Rent” signs that those interested in renting out their property will hang outside their homes. If you like something you see, check with the property owner about the parameters used to assess potential renters.
Finally, we’d like to add that the most trusted option you could use to find individual landlords is to sign up with Cirtru, the best rental resource in the United States! Find numerous rental listings by landlords and reach out to them via email to confirm whether credit checks form part of the tenant screening process they follow.
3. Be honest with your landlord
Being straightforward about the reasons that led to bad credit could serve you well. Bad credit could happen for a number of reasons, and it’s not necessary that all of them have to do with your inability to work with your finances. You might get laid off, or someone in your family might have fallen sick, draining your funds and resulting in a below-average credit score.
Have a candid discussion with your landlord and share information on what resulted in bad credit without going overboard with the details. It’s ideal if this happens before the credit check is run. Your landlord will appreciate your honesty and recognize your potential as a tenant. If all your other documents prove your worth as a well-behaved and financially sound tenant, you’re good to go!
4. Show proof of steady income
As stated earlier, in many cases, landlords will verify your income and its regularity in place of a credit check to determine your worth as a tenant. That’s exactly what proof of a steady income will ensure.
Therefore, be sure to have the relevant paperwork ready, such as pay stubs for two to three months, an income and employment verification letter from your employer, and income tax returns during the rental application process. In a word, if you offer to have the rent automatically transferred to your landlord’s bank account monthly, it might turn the tide in your favor.
5. Offer to pay more as security deposit or rent
Successful Landlords always look for tenants who have the financial means to pay monthly rent for the length of the lease they sign. Since a low credit score convinces them otherwise, it makes sense for you to offer to pay a higher security deposit to seal the deal.
You could even offer to pay rent for a couple of months should something prevent you from doing so in the future. Paying rent for anywhere between one to three months seems like a wise option. That should help the landlord feel at ease about your financial situation and be more convinced about taking you on board as a renter.
6. Get hold of a roommate
Living with roommates may be the answer to your credit problems if you think about it. Should your landlord be open to the idea of including only one name on the lease, request your roommate to sign it. That way, whoever has better credit features on the lease and your credit score doesn’t get in the way of your finding a rental house or room. But before doing that, follow a foolproof roommate vetting process to be certain that the prospective roommate has sound financials and an above-average credit score. The score and other relevant documentation you both submit for approval as part of your rental application will add more weight to it.
Remember that this may not work in all cases because you might have landlords who ask for the names of all renters to be on the lease so that everyone is equally responsible for rental payments.
If possible, you could also find a rental house or room occupied by someone with a lease, so the question of a credit check doesn’t arise and you’re off the hook. If you think of it, you benefit doubly when you find a roommate. How so? Well, you not only find a rental room or house, but you also get to split the rent and utilities. In other words, you save money!
In summary, you can use this money to pay off all your debts and enhance your credit score in the process!
7. Find a cosigner
A co-signer is a person you know well and trust, and someone with great credit, so it could be a family member or a close friend. They need to trust you well enough to sign the lease because their credit might also be at risk should you mess up with the monthly rent. Discuss your credit situation with them and see if they’re willing to sign the lease to help you get the rental room or house you’ve been eyeing.
While the cosigner is entitled to live with you since their name appears on the lease, their responsibility will be confined to paying the rent if you miss it for some reason. Having a cosigner helps the landlord sleep at night knowing someone’s there to bear the burden whenever the rent doesn’t turn up on time.
In the rare instance that you stop paying rent or make a run for it, your landlord will hold your cosigner legally accountable to pay the lease value. Consider the repercussions of such a situation on your cosigner’s credit and your relationship with them. So, to make life easier for yourself and your cosigner, use their credit only if required i.e., in any unforeseen situation.
8. Get hold of references
In the rental business, the role of reference letters can’t be stressed enough. In a special case such as yours, you’ll benefit more if you can get reliable people you’ve had a relationship with, professionally or personally, to vouch for your character. Request your employers, landlords, roommates, past and present, or even your bank, to write you a recommendation letter that speaks highly of your behavior and financial credibility.
If you have an impeccable rental history, have never missed a rental payment, and the references corroborate that, your rental application will hold far more value than anybody else’s. So, it makes sense to let the landlord know about your credit situation when they ask you to approve the credit check. Also, add that you’re carrying references from your previous landlords who can affirm your reliability as an ideal tenant.
9. Request your landlord for a shorter lease
Landlords are bound to be skeptical about your shaky credit situation because for them all that matters is the money. After all, they’re running a business, not a charitable organization. So, one way of easing their fears is to discuss the possibility of a shorter lease.
Have an open conversation and share the idea with your landlord, letting them know that you’d be willing to sign a lease for anywhere between three to six months. They can use the time to determine whether you’re financially credible, based on your ability to pay the rent timely.
If you prove them right by paying on time, a new lease can be created for a longer period and you can start living in the rental as a regular tenant. Should you default on payments, you should voluntarily leave the premises at the end of the lease period.
10. Allow yourself time to enhance your credit score
There’s always the simplest option of all to help you increase your credit score: Wait. While it’s a given that the perfect rental room or house will not wait till you attain an above-average credit score, there will be many more at your disposal once you use the spare time to take care of your outstanding bills and debts.
You could also use your credit cards sparingly for purchases and other expenses. Finally, you could even use someone else’s account provided they’ve authorized you to do so, and gradually increase your credit score to a level where most of these tips will need to be used!
Conclusion
So, do you think you’re ready to take the plunge and find a house or room for rent with a low credit score? We believe you do! We hope the information shared here gives you the insight and the knowledge you need to find the rental house or room you’ve longed for! You could use one or more of these tips, depending on what works best for you. Just remember that while time is of the essence, rushing into things might prove detrimental in the long run, so wait for a while if you need to, and keep working on bettering your credit situation.
