What Credit Score Should You Have to Rent an Apartment?

Renting an apartment is just as much about finding your new home as it is a business deal for the landlord. Because of this, prospective tenants should expect to undergo a thorough background check before being approved for an apartment. Part of the screening process includes a review of the future tenant’s credit score to assess his or her financial stability before entering into a lease with them.

1- What Is a Credit Score
2- Credit Score’s Impact When Renting
3- Credit Score for Renting an Apartment
4- No Credit Check Apartments

What Is a Credit Score?

A credit score paints a picture of the borrower’s debts and the speed and consistency in which the borrower settles them.

Credit Scores Commonly Fall within the Following Ranges:

• Poor: 570 or less
• Fair: 580 and 669
• Good: 670 and 739
• Very Good: 740 and 799
• Exceptional: 800 and 850

The score is calculated based on a host of factors, including the number of accounts the borrower holds, his or her credit and repayment history, and total debt levels.

There are Three(3) Major Credit Reporting Agencies:

• Experian
• TransUnion
• Equifax

 

The credit score gives landlords insight into a potential tenant’s financial health. Which then helps them determine whether the person would likely pay their rent on time. It’s not uncommon for landlords to set their own minimum credit score limit for applicants who are interested in renting an available apartment unit.

The Credit Score’s Impact When Renting

Landlords run credit checks on prospective tenants as part of the screening process. Your credit score is your financial report card — it shows how financially responsible you have been in the past.

Many landlords ask tenants to have a minimum credit score of 620. Anything lower will likely result in your rental application getting denied.

Having said all that, a poor credit score is not the end of the world. You may still be able to rent an apartment with a lower credit score. Some landlords may be interested in why your credit score is what it is and ask you questions about it rather than deny your application solely because your score was low.

Be mindful that having pending payments, unpaid debt, or paycheck garnishments may raise red flags for landlords since it may signal you already have multiple financial responsibilities that may cause you to miss future rent payments.

What is Considered a “Good” Credit Score for Renting an Apartment?

You’ll want to position yourself to have the best credit score possible when applying for an apartment. The concept of a “good” score may vary depending on which of the three credit reporting agencies the landlord or property manager uses to check your credit history. But, by and large, the score won’t vary between the agencies all that much.

If you’re searching for an apartment in a highly competitive market such as in New York City’s Financial District, you’ll definitely need a higher credit score.

What About No Credit Check Apartments?

People with lower credit scores often find themselves looking for apartments that don’t conduct credit checks as part of the screening process. If a landlord is willing to rent an apartment with no credit check, the tenant should be somewhat concerned. Especially considering the landlord is entrusting his or her property to a practical stranger to live in for a specified period of time. Who wouldn’t want to protect their investment by ensuring the person who lives there is able to at least pay the rent on time on a consistent basis?

A landlord may waive the credit check required in order to attract tenants. There may be a variety of reasons why the landlord is having trouble renting the place. So be sure to ask questions before signing the lease just because you need an apartment.

Conclusion:

The better the credit score, the better your chance of scoring an apartment over an interested applicant with a lower score.  And if you don’t have exceptional or good credit when you submit your rental application, don’t lose hope. There are still several options available to you for getting an apartment such as finding a co-signer who has a better credit score than yours.

Related Article:

Credit Score while Renting an Apartment in NYC
Average Credit Score Needed to Get a New House
How to Run a Credit Check on a Potential Tenant