Poor credit? Here are 5 ways you could get into an apartment without a credit check
A credit score is a numerical summation of your financial life. In three small digits it tells whether you pay your bills, whether you deserve to borrow money and how responsible you are. Combined with a credit report, your credit score creates a story that impacts every major financial decision you could hope to make.
What’s a credit report?
Despite their frequent misuse, credit scores and credit histories are different pieces of information. A credit report can be dozens of pages long, while a credit score is only a simple number.
Your credit report is a history of the relationships you’ve had with lenders and creditors over a long period. If you have credit cards, took out loans for college, bought a car, or are paying off a mortgage, then you have accounts which will appear on your credit report.
The report can be very detailed. Interest rates, frequency of late payments, indentifiers such as your address, current balances and charge-offs will all be included on the report.
A credit score, on the other hand, is a number that is produced with an algorithm that takes into account all of the data on your report. FICO is the most popular credit score company. A FICO credit score can fall anywhere between 300 and 850, the higher the better.
Why does it matter? I don’t need a loan
Your credit information is incredibly important if you want to borrow money. In fact, alongside income it is the most important factor. However, it serves other purposes as well.
Employers can run credit checks, too. Not everyone thinks that it is fair or ethical for them to do so, but as of right now it is definitely legal. Any business that deals with cash or valuables is less likely to hire employees whose poor credit could put them in financial binds. Someone who regularly owes money to creditors and has a track record of making poor financial decisions may be more inclined to steal. You could fall victim to this judgment even if your credit score is not indicative of past wrongdoing on your part.
Similarly, your credit score can be interpreted as a “good decision” score. Therefore, insurance companies may charge you higher rates if your score is bad. It’s not uncommon for insured individuals with high and low scores to have their premiums differ by hundreds of dollars annually. Pretty much every financial opportunity can hinge upon your credit.
Credit impacts where you live
Landlords and property management companies almost always run a credit check when determining whether or not you are eligible to rent one of their units. If your credit score is bad, they fear not getting paid their due rent and you’ll be turned away.
Luckily, you need not be stuck on the street just because of a few previous missteps, here are 5 ways to get into an apartment without a credit check:
1. Skip the credit check
When you find a landlord that doesn’t use credit checks as part of his or her screening process, your low score will not prove to be an obstacle for you. Finding such a landlord can be difficult, however. Generally, you won’t get into a big property or into an apartment complex this way. You’ll have to start smaller. The smaller the unit and the less expensive the rent, the more likely you’ll be able to bypass the credit check.
Newspaper classifieds, online listing (such as Craigslist) and word of mouth are great ways to find small-unit landlords. Sometimes you’ll get lucky and just see a sign taped to a telephone pole or something like that. Look for properties that are being sublet or are off the beaten path. These are your best chances.
If you’re lucky, a real estate agent may even be able to help you find the type of apartment you’re looking for. As a result of being in the business for a while, an observant agent may have an idea who does and doesn’t check credit. Regardless, you’ll probably have to determine for yourself whether or not the landlord will let you go without screening your credit history.
When you simply can’t find anyone who doesn’t rent out a unit without a credit check, you may simply have to suck it up and get screened. If that happens and your credit stinks, then you’ll be worse off than you were. Even then, however, you’re not totally finished.
2. Convince the landlord to ignore your credit
Credit is just one measure of a person’s reliability. An understanding, independent landlord will probably recognize that. You may be able to convince him or her to rent to you despite your bad credit by:
Producing positive recommendations
Bringing on a co-signer
Agreeing to pay extra
One or more of these assurances may ease your landlord’s mind.
A landlord can only learn so much about his or her new tenants before they move in. Just like hiring an employee or picking a new girlfriend, a lot of what you’d like to know won’t become evident until later. That’s why landlords depend so heavily on credit checks when screening potential tenants. It’s a bunch of information that can paint a picture about who they’re renting to.
When your poor credit seems likely to interfere with your ability to rent a new house or apartment, consider presenting recommendations from friends, religious leaders, family, co-workers, parole officers or any other number of people who know you well. If they’re willing to vouch for your a) character, and b) financial responsibility, a landlord may overlook your 490 credit score.
If appropriate, a letter explaining how you ended up in such bad financial shape could also help. Assuming the circumstances were uncommon, out of your control, or understandably drastic, the landlord may realize that the credit score portrays you in an unfair way and make an exception regarding your application.
Bringing on a co-signer is another way to demonstrate that you are responsible enough to pay your monthly rent. When someone co-signs on a loan or some other financial obligation, he or she is literally taking on the responsibility as well.
If you shirk the bill, the landlord will have the legal right to demand payment from your co-signer. This can bring great comfort to your landlord (or any other creditor) because it shows that you’re not totally untrustworthy. Plus, on the practical side, the landlord will be less likely to end up in a situation where rent is due, but never arrives.
Depending on your personal situation, you may not have someone willing to co-sign onto the agreement with you. If your history with money and financial commitment is spotty, even your friends and family won’t want to help you out because they know that they could get stuck with the bill. Even if you can find someone to sign with you, it won’t always matter. If their credit is also bad, then your landlord isn’t likely to trust them anymore than you.
5. Paying more
From the perspective of a landlord, a poor credit history increases the likelihood that the rent payments will stop coming in, even if bills are due. In order to compensate for the increased risk, some will accept a tenant on the condition that the tenant agrees to pay more each month than they would otherwise.
The extra money is designed to pay for all of the hypothetical times that a tenant ignores the rent and sticks the landlord with the bill. If you’re desperate for a new place to live and have a little bit more money to throw at the problem, you may be willing to find a landlord that will accommodate you.
After all, risk is risk, but money is money.
Remember, your credit is not a fixed number. Once the score drops, it is not stuck there forever. By paying your bills on time and in full you can slowly begin to regain a status that others will recognize as being creditworthy. When that happens, you won’t have to worry so much about whether or not a landlord checks credit, because you’ll have the type of score for which he’s searching.
Pay your bills. Settle your debts. Don’t lean on borrowed money more than you have to. In time you’ll find yourself in a better position. Keep working hard, you can do it!