What to know when applying for an apartment if you’re worried about your credit score

Credit scores have a substantial influence on your ability to do just about anything. Whether you want to apply for a new credit card or buy a car, your score will be evaluated for creditworthiness and it will determine whether you are approved for a loan, no matter the size. If you are worried about your current score, this can be quite troublesome – especially because so much depends on your credit history.

Applying to live in a new apartment is among the many things that require a decent credit score. If you are concerned about your eligibility for a place to call home, keep these tidbits in mind:

Consider getting a co-signer
If your credit is especially low and you don't see yourself improving it in the time, Apartment Guide suggested asking someone to co-sign for the apartment. Ensure he or she is either a close friend or family member who is willing to assume both legal and financial responsibility should you default on any payments throughout the duration of the lease.

You also want to ensure the person you select as a co-signer has good credit.

Understand additional factors considered 
While your credit score helps a landlord evaluate your ability to pay bills on time, there are other factors he or she will likely consider when looking over your apartment application. Apartment Guide indicated you will need to provide: 

  • Bank statements or pay stubs
  • Letters of recommendation 
  • Rental history 
  • Previous employment 

If you can prove yourself as a trustable tenant with these items, you can increase your chances of approval without worrying about your credit score. 

Offer a security deposit 
While many landlords already require a security deposit, you may want to consider offering more to increase your chances of approval. However, keep in mind there may be strict rules regarding deposits for some properties, so this should not be your only tactic. 

Usually you want to offer a deposit in relation to the monthly rent charge. Consider offering between three and six months' rent in advance depending on your credit score and other factors that may keep you from qualifying for an apartment. 

"Consider offering between three and six months' rent in advance."

Indicate your plan for staying current 
Since landlords view a low credit score as an issue because it may translate to late or missing rent payments, letting the individual know how you plan to stay on track may be beneficial. Write your own recommendation letter can be a great way to humanize your application and demonstrate that you can be a trustworthy tenant.

You can indicate that you will have rent payments automatically deducted from your bank account each month and funneled into an account the landlord can access. Ensure you have support from your employer up front when suggesting this solution. 

Consider explaining the reason behind your lower credit score as landlords may be more sympathetic toward identity theft or medical debt than they would be for other types of debt, such as bankruptcy. If your credit score was negatively impacted due to a situation that was out of your control, provide bank statements or other documents that support your story.  

Solve issues on your credit report 
If you have inaccurate negative items contributing to a lower score, address these right away. Working with a credit repair company is a great way to get the ball rolling. These experts have the experience necessary to build a case you can present to creditors and credit bureaus to ensure your financial history is accurately represented by your credit score. 

If your credit score is low for reasons within your control, working on fixing those should be a priority – especially if it is noticeably impacted your ability to qualify for apartments. 

Improve your score 
According to U.S. News & World Report, paying bills on time and in full is essential to bringing your score to a higher and more acceptable range. Fair credit usually lands somewhere between 600 and 690, while good credit is above 700. 

When it comes to credit cards, keep your balance below 30 percent of your credit limit. However, keeping it below 10 percent is ideal. 

After paying off your cards, avoid closing them as having the history of paying it off is actually better for the final calculation. 

Know how apartment credit checks impact your score 
Whenever a hard inquiry occurs, your credit score is impacted. However, soft inquiries do not negatively affect your credit, according to the San Francisco Chronicle. 

Unfortunately, when a landlord looks up your credit report, this is categorized as a hard inquiry. To protect your credit score, limit how many apartment applications you send out. However, keep in mind that these hard inquiries may not diminish your score too greatly. 

Improve your credit score and know how to present yourself to a landlord when applying for an apartment, and you will thank yourself.