What Credit Score Do I Need to Rent an Apartment?

So, you’ve found the perfect place. You’ve searched high and low, toured apartments, talked with property managers, and narrowed down your choices to one finalist. Congratulations!

Your next step is to apply, get accepted, and sign a lease. But before you do all that, you need to make sure your credit is in a good spot.

Table of Contents

• Why Landlords Check Credit
• Understanding Your Credit Report
• What Credit Score Do You Need?
• Renting with Bad Credit
• How to Improve Your Credit Score
• FAQs

Why Landlords Check Credit

Background checks are a standard part of the rental application process, and property managers use the information in your background check to determine whether you’ll be a trustworthy tenant. Background checks show your rental history, employment history, criminal history, and credit history.

Property managers often rely on credit reports to accept or deny a rental application. Credit reports show your payment history on lines of credit, delinquent accounts, and derogatory marks like collections. Looking at a credit report can clue landlords in on whether a renter will pay rent on time.

Understanding Your Credit Report

Your credit report is essentially a report card for your credit behavior. A credit report shows your personal information, employer history, credit accounts, and credit inquiries.

When you apply for an apartment, the property manager will look at your payment behavior, outstanding accounts, and any negative marks like overdue payments or collections to determine if you’re a trustworthy tenant.

Credit score vs. credit report

Your credit score is a numeric summary of everything in your credit report. Credit scores range from 300 to 850, with 850 being a perfect score. Each credit bureau uses its own algorithm to calculate your credit score, so your score will vary between your credit reports.

What Credit Score Do You Need?

The credit score you need to rent an apartment depends on the type of apartment you’re looking to lease and the local market trends.

Typical ranges

There’s no universal minimum, but most property managers require a credit score of at least 600. Luxury apartment communities may require a score closer to 700.

Regional and market factors

The credit score you need to rent an apartment may vary depending on the city you’re moving to.

Rentals in competitive, urban markets often require higher credit scores due to higher demand and limited supply. However, rentals in lower-demand markets like rural areas may be willing to accept applicants with lower credit scores.

Renting with Bad Credit

It can be discouraging looking for a new place when you have bad credit or no credit, especially if your applications keep getting denied. With a little patience and flexibility, you can meet property managers halfway and find a way to lease your dream apartment.

Offer to pay a higher security deposit

Landlords use a security deposit to cover the cost of unpaid rent or property damage. Offering to pay a higher-than-normal security deposit may ease a property manager’s concerns about your reliability by giving them a more substantial safety net.

Bring references and proof of income

Providing proof of your character and income can help establish trust with a property manager. Request character references from your coworkers or managers, and contact past landlords to provide written confirmation of on-time rent payments.

Make sure you come prepared with proof of income, too. You can use pay stubs, your tax return, bank statements, or a job offer letter to show a landlord that you can afford monthly rent payments.

Have a cosigner or guarantor

Signing a lease with a cosigner or guarantor with good credit can make it easier for you to secure an apartment. Both cosigners and guarantors agree to take on financial responsibility for your rent payments, but they have a few key differences:

• A cosigner’s name is on the lease as a tenant, giving them legal rights to live on the property. A guarantor is not on the lease as a tenant.
• Cosigners are immediately responsible for paying rent, while guarantors are only responsible for paying rent if the tenant fails to pay rent on their own.

Cosigners and guarantors offer a financial safety net if you fail to pay rent, making property managers more likely to rent to you.

Find a roommate

A cosigner can double as a roommate, making it a win-win. Renting with a roommate tends to be cheaper, saving you money and making it easier to get approved for a rental by lowering the income required to rent.

Rent from a private landlord

Private landlords may be more willing to compromise on renting requirements than a large apartment community. A private landlord will be able to have an open discussion with you about your finances and may be open to negotiations. Come prepared, be honest, and show landlords that you’re working toward a better credit score.

How to Improve Your Credit Score

There are many ways to improve your credit score, but here are four habits that can set you up for success.

Get a credit card

If you don’t already have a credit card, now’s the time to apply for one. If you’ve struggled to get a standard credit card, there are other options.

One option is a secured credit card. Like an apartment, a secured card requires a security deposit that will cover any missed payments. A secured card is a great way to show credit card companies that you’ll pay your bills on time, and they may eventually upgrade you to a standard card. You’ll get your security deposit back when you close or upgrade your secured card.

Another option is to become an authorized user on someone else’s credit card account. Having a close friend or family member with good credit add you as an authorized user on their account will improve your credit by boosting your credit age and history. It’s important to understand that you and the primary cardholder can help or hurt each other’s credit scores, so choose someone you trust and have open conversations about your bill payments.

Pay bills on time

Once you get a credit card, pay your credit card bill in full every month. This helps you avoid interest rates while adding good payment behavior to your credit report. Set up automatic payments to make sure you always pay on time.

If you have debt, make it a priority to pay off outstanding accounts. Older late payments won’t impact your score as much as recent bills, but the sooner your debt is paid, the sooner your score can increase.

Check your credit reports

Federal law entitles you to a free credit report from each credit bureau every year. Request copies of your credit reports every year so you know where you stand.

Each bureau uses a different algorithm to calculate credit scores, so your three credit reports will look a little different. Make sure you read through all three to verify the information, and contact the credit bureaus to dispute any errors you find.

Monitor your credit

Credit monitoring apps provide you with a snapshot of your credit report and a monthly credit score. You’ll be notified of any changes to your credit score, helping you address issues immediately.

In addition to helping you keep an eye on your credit, credit monitoring apps can also help prevent fraud and identity theft by notifying you of unfamiliar new credit accounts on your report.

There’s no one-size-fits-all approach to building your credit, and securing an apartment can look different if you’re working on bringing your credit score up. Be honest with property managers, and be willing to make concessions to lease your dream apartment. Once your credit score starts to increase, you’ll be on your way to renting with no issue.