Can I Rent an Apartment with Bad Credit?
If you have had some financial difficulties, they may have left their mark on your credit score or credit history. However, you still need a place to live, so this article is a quick rundown on what bad credit will mean for your options to rent an apartment.
Bart Shirley
8/12/20263 min read
Life doesn't always go as planned. Bankruptcies, late payments, or judgments against you are just a few of the life events that can cause your credit score to fall.
When those events occur, you may worry that you can't find a new place to live. Several of my clients have mentioned those concerns before.
However, the good news is that a bad credit score is unlikely to be the thing that keeps you out of many apartments. Let's start with the basics, though, and make sure we're all on the same page.
What is a "bad" credit score, according to apartments?
A credit score is a three-digit number that is a reflection of your creditworthiness. The number is generated by various data analysis firms like FICO or VantageScore, which, in turn, come up with the scores based upon the credit reports gathered by the three top credit bureaus - Experian, TransUnion, and Equifax.
Credit scores fall between 300 and 850. The higher the score, the more creditworthy banks and other financial institutions (including apartments) believe you to be.
Now, this page is not meant to be an expert dive into credit ratings, and I'm not going to get into what the different levels of creditworthiness might be. However, in very general terms, my experience has been that apartment complexes want to see credit scores of 600 or greater. Individual apartments will vary.
How apartments usually handle low credit scores
There's some good news, though. A credit score that falls beneath an apartment complex's policy threshold is not necessarily the end of the story for your application.
What often happens is that the apartment will issue an approval with conditions. This type of approval means that you can still move into the new place, but you'll have to jump through some additional hurdles (more than someone with higher credit) to do so.
Those hurdles vary from property to property. The most common type of condition that I hear about is that you will have to pay an increased security deposit. This increased amount usually approaches or equals the first month of rent.
Alternatively, you may have to pay an additional month's worth of rent upfront. Doing so both secures your place at the complex (as a "serious" tenant) and compensates the complex for the risk that they are taking by leasing to you - fairly or unfairly, your credit score is seen as a reflection of how likely you are to complete the terms of the lease.
Another common type of condition is that you may be required to get a co-signer on your lease. This person is someone who agrees to be financially responsible for the lease, so it tends to be a family member or friend who knows you well and is willing to step in on your behalf.
What you need to do about a low credit score
A low credit score can feel like an albatross around your neck, always weighing you down. The truth of the matter is that even if you have gotten yourself into a better financial position recently, credit scores can take a while to recover.
What you can do, though, is work to resolve any ongoing issues that contribute to a low credit score. In particular, you need to pay off the back rent you owe on evictions as soon as possible.
Apartments are quite sensitive about this particular issue because unpaid eviction balances are seen as a direct reflection of the type of tenant you are. From their point of view, you have a history of missing rent and being unable to make it up later on.
That may be harsh. That may not reflect who you are. You may bristle at the suggestion that you are that type of person.
I'm not here to judge. But, it doesn't do any good to ignore the reality of the situation.
Is anyone ever completely out of luck for getting an apartment?
The section above may have you feeling hopeless. You may wonder if you'll ever be able to rent again.
DON'T DESPAIR! Your options may be limited, but they are not zero.
There are apartments that work with tenants who have had troubles in their past. Look for 2nd chance apartments in your area.
The best thing to do is work with a locator like myself. When you do, though, be upfront with them. One of the hardest parts of my job is trying to help someone when I don't have the full picture.
Like I said, I'm not here to judge. But, if you have or have had significant issues in your credit or rental history, I need to know everything about them so I can find the places you can apply.
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Bart Shirley is a licensed real estate agent (#843214) in the State of Texas. He is an affiliate of C. R. Realty of Katy, Texas, and sponsored by broker Charles Ray (#498579). All commissions earned by aBARTments.com and Bart Shirley are to be issued to C. R. Realty, not Bart Shirley.
C. R. Realty is located at 5604 1st Street #101, Katy, Texas 77493. The office phone number is (832)646-0512.