Renting with bad credit

How to rent a place with no or bad credit

Companies use credit to determine whether or not you can borrow money or services. The same applies to landlords – if he or she determines your credit is too bad, they won’t rent to you.

Each landlord is different with their minimum credit requirements. They also weigh other factors differently than others, such as rental history and salary. Typically, landlords want your rent to be less than 1/3 of your yearly salary.

Here are some things you can do if you have poor or no credit:

Avoid a credit check

Try finding a landlord that doesn’t do credit checks. This is easier with individual landlords, those trying to rent a single house or condo. Unfortunately, most property management companies (those that manage apartments) perform credit checks.

If the place you want requires a credit check, you still have options.

Get recommended

Contact the people whom you’ve had a financial relationship with – previous landlords, financial institutions (car loan), and current previous employers. Have them write a letter on your behalf vouching for your financial responsibility.

If you have past due accounts listed on your credit report, pay them off and ask the creditor or lending institution to write a letter stating that your account has been paid in full.

Use a co-signer

If you know someone with good credit and they are willing, they can co-sign your lease. This means your name is on the lease, but if you get evicted or stop paying your rent for whatever reason the landlord can legally go after the co-signer for the remaining value of the lease.

If you’re lucky enough to find a landlord that will overlook weak credit, you should still expect to pay more than someone with perfect credit. They will either increase the amount of your deposit or make you pay one month rent in advance.