How to Rent a Home with Low Credit Scores?
“Credit score” plays an important role in many places. Of all the things you focus on, you must consider the tenant’s credit score. A person’s credit history speaks a thousand things about his/her financial status and lifestyle. This is why the credit score is a part of renting out homes. Landlords may reject your application if you have poor credit histories. In fact, many landlords verify credit scores before saying yes/no to a tenant. Even when your salary is sizable and your rental history is spotless, landlords may reject your application for a bad credit rating! With this being said, here are few ways on how to rent with bad credit ratings.
#1 Know Your Credit
First of all, you must understand your credit rating. There is nothing wrong in have bad credit ratings. Yet, you must be aware of your state. Keep an eye on your credit score. Even before you look for apartments, you must analyze your credit report. Credit scores can be fetched from three credit bureaus. You must approach all these bureaus and request for a credit report. Next, you must check if there are errors in your credit report. If yes, you should correct them. With less (or no) negative info on your credit report, you will have a better chance of finding a rental home.
#2 Properties without credit verification
When you have poor credit ratings, you should look for properties without credit verification. You will definitely come across landlords who are not concerned about your credit rating. In most cases, condos and apartments managed by property managers will oblige on credit checks. These properties will turn your application down if your credit scores are bad. Instead, look for properties that don’t need high credit ratings. Individual landlords tend to choose tenants with solid monthly incomes, a friendly soul, and flawless rental histories. The following resources will help you find rentals without credit checks:
- -Craigslist.org is a famous online listing. Craigslist allows both property managers and landlords to post advertisements. Go through craigslist and you will find properties that don’t verify credit reports.
- -Your local newspaper will have many advertisements too! Explore the classified section in your region’s newspapers.
- -Don’t forget to approach a real estate agent. Real estate agents will show you many properties. People who live elsewhere, find real estate agents very helpful.
#3 A Co-signer
If you can get a co-signer or someone who can back you up, the impact of your bad credit score can be canceled. Try to contact your friends and dear ones. To play safe, you must approach individuals (or organizations) that are financially responsible. This includes previous employers, landlords, and the bank. Request for a reference letter. Utility firms and landlords might deny your request, especially if you have any unpaid dues. If possible, find a letter that can justify your bad credit rating. This letter can talk about anything like unemployment, medical expenses, and divorce. The letter should create a constructive impression and affirm that you can pay rent on time. When you draft such letters to be very careful. Don’t get your landlord unnecessarily doubtful. Co-signing your rental application is a big move! Here, the co-signer should have a good credit rating too. If you get evicted or skip rent, the co-signer will be responsible for paying. When you use another person’s financial rank, think twice and be more cautious.
#4 A Good Income
People with provable incomes and a stable job will find a home! Voila, doesn’t this sound promising? Before you change your home or look for rental properties, make at least 6 months of income. This way you will meet the needs and gain the confidence of landlords. Also, ensure that you can afford the rent on time. There is a thin line between “paying rent” and “paying rent on time”. Don’t forget to document details of your steady income. Three to six months of paychecks will be sufficient.
#5 Pay an Advance
When you are unable to get a co-signer or show your paystubs, be prepared to pay upfront rent. Landlords will never “disapprove” your idea to pay upfront. This amount can be used as a security deposit or rent. Some landlords tend to demand higher security deposit when the tenant has low credit ratings. If your landlord gives you this option, go for it! After all, the landlord is trying to help you.
On the whole, people with bad credits can find rental properties. But, they should start improving their financial status. This is when the hunt becomes easier and faster.
If you are a first-time investor, the idea of buying a brand new building will be daunting. This is when many landlords decide to buy-to-let...
Are you planning to rent out your property? Is this your first property for rent? If yes, there are few things you must keep in mind. Accord...