9 MIN READ
The Ultimate Guide to Renting an Apartment When You Have Bad Credit
You’ve found the perfect apartment: It’s within biking distance of the office, has a washer and dryer (in the unit?!) and a butler always greets you with a glass of wine when you get home.
OK, maybe it’s just four walls, a roof and a place to plug in your coffee maker.
You send in your lease application, call your designated moving friend (you know, the one with the pickup truck) and wait to hear back from your potential landlord.
But then you get a phone call saying your application has been denied — your low credit score screams “unreliable renter.”
And since your credit score is, ahem, not great, you might be struggling to find a place to live.
Here’s the deal: Renting with bad credit is hard.
But we’ve put together a guide to understanding how to get an apartment with bad credit — and what you should know along the way.
1. The Easiest Answer is a Guarantor or Co-Signer
The quickest solution is to have someone co-sign the lease with you.
A co-signer generally needs to have the things adulthood dreams are made of: a secure income and a rockin’ credit score.
Usually this person would be your parent or a relative, although it wouldn’t be unheard of to have a friend help you in the right situation. But remember — issues involving money often put excessive strain on relationships.
Make sure you’re able to make the monthly payments before involving someone else’s good credit. If you flake out, they’re responsible for covering your rent.
Or, consider going through a company like Anchor Your Assets. Approval is based on your income, but the company guarantees rental approval by acting as your co-signer while still allowing the lease to be under your name. It charges a fee, but only if you’re approved for an apartment.
Now if you’ve found a guarantor, you’re good to go. If you can’t find one, or you know, you’re an adult who wants to cut the parent bailout lifeline, read on for some tips and tricks for navigating the process on your own.
2. Know What a Potential Landlord Will Find On Your Credit Report
Start with the glaring mistakes, like a bill you know you paid (and have proof!).
Then, pay off some of your easier to manage debts (i.e. overdue water bills and small medical bills), and work to get out from under those pesky collection agencies. (Pro tip: You can even negotiate some things off your credit report entirely.)
Some of the smudges on your credit report will be there a little longer. Think: big medical bills or loan defaults. You might just have to ride those out while you continue to prove yourself a reliable renter in other ways.
It’s a good idea to know exactly what you’re dealing with. Later on, you won’t want to be caught off guard if you do some negotiating (which you should).
3. Keep These Things in Mind When Negotiating a Lease
What’s the worst that can happen? They say no, and you move on.
Call the office and ask what criteria are used for approval, then formulate your plan. Most places look for good credit (bear with me!) and take-home pay of roughly three to four times the monthly rent, so have those paystubs ready.
Just remember that landlords want to fill spaces (because $$$), so they’re often happy to negotiate a contract that you’re both comfortable signing.
Letters of Recommendation aren’t Just for Job Applications
Presenting your potential landlord with letters of recommendation should be your first move.
These can come from a few sources (previous landlords, old roommates, even your bank) and should paint a picture of a responsible, bill-paying adult. You should also ask your employer to write a letter stating you have a secure income and are a reliable employee.
Letters of recommendation will prove to your landlord that you’re serious about being a responsible renter.
Besides, you’ll look more prepared and like you went out of your way to put the landlord’s mind at ease — both of which will score some points.
Be Prepared to Pay Extra
Because your low credit score tells a potential landlord you might be a risk, prepare to pay a little extra upfront. They’ll often ask for a security deposit that could be a third month’s rent or more.
Or, consider starting with a month-to-month, three- or six-month lease. Rent is usually higher for shorter lease terms, but this gives the landlord an easy out if you do struggle to pay the rent.
You can eventually revisit the idea of a 12-month lease after building a good relationship with your landlord.
In some (read: desperate) situations, you could even offer outright to pay a higher monthly rent amount. Some landlords will be willing to take the risk for a higher price.
Explain Yourself with a Good, Old-Fashioned Appeal to Humanity
If none of these negotiation tactics have worked, it can never hurt to do a little begging (no shame in that game).
Take the time to explain the black marks on your credit report (like that whopper of a hospital bill) and talk about yourself. Be up front about anything the credit check might bring up, and explain what you’re doing to fix your credit score moving forward.
Providing a little backstory will help the landlord to see you as a responsible, honest person who just needs a place to live.
4. You’ll Have Better Luck if You’re Willing to Live Outside of the Area
If you’ve tried negotiating, but are still struggling to secure a lease, you might need to expand your search criteria.
Cities are competitive — competitive jobs, competitive parking and competitive housing. Apartment complexes have to have a system for narrowing down potential tenants. The easiest decision maker? A credit check.
If you’re willing to move outside of the popular areas, you’ll have better luck finding an apartment that accepts you regardless of your credit score, and one that doesn’t have three other people with good credit in a Hunger Games-style battle for that downtown loft.
Besides, there are plenty of ways to make the commute sting less, like making money by carpooling.
5. Finding a Roommate Could Be the Answer to Your Renting Woes
I know, roommates are the worst.
But having a roommate is good for a few reasons, and not just because you can sneak bites of their leftovers.
If you can find a roommate with a better credit score, have them put their name on the lease while you sublease directly from them. Just don’t ask about it on the first roomie-date… things could get awkward…
Or, find someone advertising a room to rent by checking community message boards and Craigslist (cautiously). You might find someone who is already securely on a lease and is just looking for a roommate to occupy the extra space and fork over some cash.
In most cases, you’ll be able to move right in — no credit check required.
Either way, your roommate is trusting you to pay your rent, even if there’s no contract. Hand over those rent checks in a timely fashion — that money is worked into your roommate’s budget and will definitely be missed.
Additionally, because there’s no formal lease agreement, you’ll also have to put in some effort to become the ideal tenant or risk getting booted out. (Yep, even if you’re family.)
6. Some Apartments Don’t Check Credit
If all else fails, there are apartment complexes that don’t check credit scores.
While these may be outside of your target area, they’re worth considering. You’ll be able to nail down a lease with just your direct deposit history and those letters of recommendation.
A quick Google search using “your area” + “no credit check apartment” returns websites like Yelp and Yellow Pages, featuring lists of complexes where people have had success in renting with bad credit — or even no credit.
If you’re near a college town, look into university-affiliated housing. These places often don’t request a credit check because most students don’t have any credit at all. They’ll be serious about your proof of income, though!
7. Budget Extra Time for Your Search
Start apartment hunting yesterday.
Searching for an apartment that doesn’t check credit can be a lengthy process, and you don’t want to be forced to sign a more expensive lease just because your time is up.
Your search is going to take some extra legwork — and consequently, some extra time.
And if we know one thing as side-hustlin’ Penny Hoarders, it’s that time is money!
Once you find the right apartment, spend the next year or two mending your credit history and bringing up your score.
And one final tip: Ask to have your rent payments reported to the credit bureaus.
Your landlord might already be prepared to do this, but if not, you can do it yourself. Be careful though — if you do fail to pay the rent, it will only bring your score down further.
Your Turn: Have you ever had trouble renting an apartment because of your credit score?
Disclosure: You wouldn’t believe how much coffee The Penny Hoarder team goes through. This post contains affiliate links so we can keep the grinds stocked!
Grace Schweizer is a junior writer at The Penny Hoarder. And yeah, she likes her coffee.
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