The most commonly used credit scoring model is the FICO score, which ranges from 300 to 850.
According to Experian, about 58% of Americans have a score that’s 703 or higher – a score of 670 or above is considered to be “good” or better, while scores that are lower than 579 are considered to be poor. If you fall into that category, it’s unlikely that you’ll qualify for a standard home loan, but your odds of apartment, home or condo renting versus owning, are better as there are a few more ways to get around bad credit.
Search for No Credit Check Options
High-end apartments are almost always going to require a credit check, as do homes rented through most property management companies, which are both likely to turn you down if you have bad credit. What you’ll want to do is look for properties that are owned by individuals who don’t check credit, or who may be more willing to take the risk on someone who may have a poor credit history but has reliable employment, solid income, and a good rental history. You can always check the rental statistics in Nashville, Oklahoma, or Denver if you need an idea where to go. These are the common and cheapest states to live in.
You might have good luck on Craigslist.org as many landlords advertise there – it will take time to sift through all the listings, but it’s often worth it. Keep an eye out for red flags to avoid a scam. Never pay money before viewing the place – if they can’t show it to you, move on.
Another option is to take a drive through the neighborhoods you want to move to as some homeowners only advertise with “For Rent” signs.
Pay More in Advance
If you pay more rent in advance, perhaps three months+, or a higher security deposit, you may be able to get approved despite poor credit. Not only does it show that you’re committed, but it also provides the landlord with extra cash that would cover at least some of the potential losses or damages if you end up skipping out on the rent. Of course, that may mean planning ahead, saving as much money as you can before you have to move.
Get a Co-Signer
If you have a family member or friend with good credit who is willing to cosign, you may be able to get your application approved as that person will be responsible if you fail to make the monthly payments.
A cosigner is agreeing to cover those payments in the event of a default which provides reassurance to the landlord. Of course, the last thing you’d want to have happen is for them to actually have to make the payments for you, so it’s essential to make sure you can comfortably afford to do it yourself.
An Honest Explanation and Recommendation Letters
If your credit score is low due to a job loss, medical problems or another type of financial setback out of your control, the landlord may be willing to rent to you provided you’re honest and upfront about it. It’s a big plus if you can also bring recommendation letters that help to reassure them that you’re a responsible person.
Past roommates, previous landlords and your current employer can be good options for vouching for your character. Have great reviews on Airbnb? Even if those are short term rentals, that positive profile might help.
