Renting With Bad Credit

With a booming rental market, how do those with bad credit compete?

Rentals are hot right now. Renters understand that competition in certain areas is fierce, and they are doing all they can to convince a landlord to go with them. Choosing an occupancy date the landlord wants, along with offering much more than asking price has become quite common. Some tenants will even go so far as to pay 6 months of rent up front just to get the property.

When choosing a tenant, a landlord will commonly request interested parties to fill out an application, provide references and employment verification letters, and they will also request a credit check.

With all this competition for rentals, how can those with not-so-great credit compete?

Rule number one- know your credit score. Nothing is worse than thinking you have a great credit score, only to find out that you do not as the landlord is ripping up the lease in front of you. On the other hand, if you think you have a horrible credit score, but have not had the numbers run for some time, it is better to pull your report and have the actual facts at hand. It is always more beneficial to work at locating a property knowing what you have to work with.

Whatever you do, don’t guess your credit score. These numbers change every day, and it could be possible that the number is actually better than what you may believe.

Renters can easily pull their own credit score if they are not working with an agent. You can download a free credit report at www.annualcreditreport.com. Credit scores range from 300 to 850. Scores above 700 are considered to be good.

Rule number two- be honest. If you apply for a property, do not let the landlord discover your low credit on their own. If you are willing to let a landlord run your credit, warn them about the possibility of a low score ahead of time. No one likes surprises, especially a landlord.

Rule number three- explain. Set up a face-to-face meeting with the landlord and talk about your circumstances. They may be willing to take certain factors into consideration when making the decision on whether to extend you a lease or not. Matters of high medical bills, divorce, or student loan debt may be deemed lesser offenses from the perspective of a landlord.

If a face-to-face meeting is not possible, try writing a cover letter explaining your credit history. You don’t need to go into too much detail, but let the landlord know how the issues came up, and what you have done to correct them.

There are numerous other techniques a renter can use to persuade a landlord to rent to them.

Try putting down a larger security deposit. While it may be extremely difficult for some people to find extra money to put down towards a deposit, this method may convince a landlord to lease to you. Putting down more money when you sign the lease signals that you are less of a risk.

In addition to the usual letters of reference from your employer, another strategy is to get a letter from your previous landlord indicating that you paid rent on time and were a good tenant. The letter should clearly indicate the name of your previous landlord, along with a contact number in case the current landlord wants to follow up with more questions. You could even go so far as to provide proof of your timely payments by printing out rent-payment stubs or copies of canceled checks for the past two years and submit these with your application.

Although it might take you longer to find a home to rent if you have bad credit, you have a lot of control over the situation as long as you can show why you aren’t as risky a proposition as your credit suggests.

If you have bad credit, you want to demonstrate your credibility to a landlord by providing any evidence that enhances your image as a reliable tenant. Bad credit is deemed a high risk and you have to give them some incentive to do business with you. They don't know you and you are a risk until you can prove otherwise.

J. Cattano August 23, 2012 at 01:09 PM
@ Scardale and Revira- you both seem to be landlords - so that being the case I will not get into a battle of wits with an unarmed and disproportionate opponent. Let's just agree to disagree. This article does NOT simply address renters with bad credit - it puts Landlords ( many times - Slumlords) in the drivers seat. This is my issue - I am not speaking from a "bad experience" but a bad pattern that is real and exists all over. The tenant from hell comment just supports my position that there are landlords in the multitudes out there with control issues and have no regard for the tenant - just their precious rent check - it takes a balance of moral integrity ans business acumen to be a truly deserving landlord - one that has the goods- delivers them and is fair and honest - not just seeing dollar signs. Revira- YOU sound like you need to get a lawyer as it appears that you have been burned by a deadbeat - or where you the deadbeat?
Scarsdale Neighbor August 23, 2012 at 03:10 PM
J- I think there are more tenants out there that make a living at playing the system, than there are deadbeat landlords. I am not a landlord like you assume, but a friend of mine is. She once rented out a house to a lady and her 2 kids. While my friend had received a higher offer on the rent ($50 more a month) she preferred to rent to this lady because she had some sob story about how she needed to start a new life away from her abusive husband. My friend rented to her wanting to help her out. Well, not only did the husband come back, but the lady took her in and they stopped paying rent. When my friend tried to ask for the rent, the husband basically threatened her and slammed the door in her face. It took her a year to evict because they always pleaded in court for more time- and when there are children involved, the judge will almost always grant extensions. Basically, my friend supported these people for that year. She was paying the taxes on the property and the mortgage. Eventually she did get them out- but they wrecked the whole place. The one month's security the lady put down was barely enough to cover the appliances they broke, let alone the ruined carpets/walls/bathrooms, etc. I don't know the statistics- all I do know is that I have heard of more tenant horror stories than I have about slum landlords. In the end, I think its easier for the tenant to burn a landlord than it is for a landlord to burn a tenant since the landlord has more to risk.
Ross Revira August 23, 2012 at 04:10 PM
@ deadbeat tenant aka J. Cattano. As I previously posted nobody puts a gun to the head of a tenant to rent a house or apartment. @ Scarsdale Neighbor you are correct
J. Cattano August 23, 2012 at 07:02 PM
Yes you both are right - there are some real low lifes out there - they truly do ruin it for the rest, it's most unfortunate - BOTH sides however do have rights not just the landlords - who are many times very good but also many times NOT SO GOOD.
April Lara April 30, 2013 at 10:35 AM
I strongly believe that being honest is very important when renting with bad credit. There are some people who fool the property owners, which causes them to even distrust them more. Demonstrating your credibility is A-MUST as well! What I can suggest is that you also find a company that can act as guarantor to help you out because I did. EZ Lease Rentals was the company that I chose to act as guarantor and I had no problems renting an apartment anymore even with bad credit.


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