credit score Renting an Apartment

What Credit Score Is Needed for Renting an Apartment

What Credit Score Is Needed for Renting an Apartment?

If you want to rent an apartment, the landlord or company will ask for your credit check to ensure, you pay the bills on time and didn’t have any financial disasters before. What are they looking for?

Landlords as well as rental companies look for consistency in rent payments and to see if any money is owed to a prior landlord or apartment manager. However, if you have had bankruptcies, foreclosures, evictions, or unpaid loans or credit cards, this will be a red flag to them. When your credit report is pulled for the apartment, it is considered a soft pull and will not drop your FICO score as a hard pull does.

It is more like a background check. Your employment history will be on file and maybe you are asked to give the gross income as well because the last thing a landlord wants is to be spending more than what they can afford on rent or utilities. Assume for a moment you and another applicant are looking at a similar apartment. You have the best score (700s), while the other guy has an excellent score (800s).

Everything else such as finances, being equal, it’ll make sense for the landlord for selecting the other guy with a higher credit score. And in competitive markets such as San Francisco or New York City, excellent credit is crucial.

Landlords in these desirable markets can sometimes even need a minimum credit score to be able to rent in their buildings. Generally speaking, the higher the rent, the better credit you will require.

Landlords or property management companies want reassurance that you can pay your rent on time and you are responsible. Solid credit history and best credit score are 2 ways to show this. If you are dealing with a bad score or no credit score at all, you will possibly have a difficult time renting an apartment. It is possibly best to hold off unless you can increase your score.

Why do They want to Know About Credit Score?

One can think that how loans or credit cards affect on getting a house or an apartment, but they actually do. Your credit rating can tell the landlord if you’re a good payer which means somebody who won’t pay each month without fail but also pay on time for the full length of the lease. A broker, landlord, or management company will use a 3rd-party credit service to pull up not only your FICO score but also a detailed credit report. They can also see open collections or payment delinquencies and judge whether you’re a good or risky candidate.

What credit score is necessary for renting an apartment?

Most companies or people renting an apartment will ask for credit scores from applicants to be 620 or higher than that. People with credit scores lower than 620 may indicate they’re a high-risk renter.

  • Anything below 579 is very poor
  • Between 580-669 is fair
  • 740-799 is very good
  • Anything over 800 is excellent

What can you do if you think you’ve bad or no credit? Before shopping for an apartment, it is a good idea to get the free Equifax or TransUnion credit scores and reports. You can also get a free copy of your credit report from each of the 3 main credit bureaus each year at AnnualCreditReport.com. If your score is less than what you see, make sure to go over the report, there may be incorrect info you can dispute. Sometimes things occurred some years prior that are on the report. If this is the case, consider appealing to your landlord with recent statements of bill pay history, like cell phone bills and utilities to show you have been paying on time. If you have a healthy bank account, you can also provide a bank statement showing you’ve some cash.

How Do Credit Scores Affect Renting?

Potential landlords or leasing agents run credit checks on potential applicants to evaluate an individual’s financial condition. Your credit score is like a financial report card, and it is used to determine how financially responsible you have been in the past.

It can feel unfair, particularly if you have worked hard to get yourself out of debt but your credit score has not still recovered. But put yourself in the landlord’s or leasing company’s shoes, their rental property is a business, and renting to somebody with a low credit score appears riskier than renting to somebody with the best credit score.

Most companies or people renting an apartment want credit scores from applicants to be 620 or higher.

Using a credit score for getting the possibility of a tenant paying rent on time, and throughout the life of the lease isn’t a personal attack. It is easily a business decision. Most companies or people renting an apartment want credit scores from applicants to be 620 or higher. People with credit scores lower than 620 can indicate a high risk of default on rent owed. A low credit score can mean you are less probably to be approved for the rental you want, particularly if you are looking to rent in a famous area.

If 10 other people apply for the apartment, it makes the best financial sense for the landlord to accept a person with a high credit score. A low credit score doesn’t mean you will not get approved at all. You can yet rent an apartment with poor credit. Here is the potential difference: landlords cannot base a decision off at the exact number associated with your credit score but at the cause of your bad credit. If you’ve unpaid items, late payments, and garnishments, you can send up a red flag. They indicate that you cannot pay rent when it is due or reliably each month. On the other hand, if you have customer, medical, and student loan debt but make your payments on time, a lower credit score cannot be viewed with such a crucial eye.

How to raise your credit score?

If you want to increase your credit score before you search for an apartment, here are quick tips to help you:

  • Pay your bills on time
  • Pay more than the minimum amount for credit cards or pay them off
  • Ask a close friend or family member if you may be added as an authorized user on one of their credit cards
  • Sign up for a secured credit card that reports to all three credit bureaus
  • If you are renting, ask your property manager if they can report your on-time rental payments to the bureaus

Whether you need help building your business credit or personal credit, the credit experts at YMA Financial are here to assist you now!

Give us a call:  864-249-1439 888-531-6611

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