Good credit, bad credit, or no credit: tips on apartment credit check

Good credit, bad credit, or no credit: tips on apartment credit check

Posted 09.14.2009 in Articles by SMonteith

A credit check is usually the last step of the process to be approved for an apartment; it's essentially the last hurdle between you and a new apartment. A bad credit report can result in losing out on your new place while having no credit can be just as bad, but if you want to make sure you the apartment credit check doesn't trip you up, there are steps you should follow.

When a landlord runs an apartment credit check they are looking at the consumer’s bill paying history. The credit report shows whether or not payments have been made on time, and how much debt the consumer has. It also displays how many times the consumer has applied for credit. Negative information, like defaulted accounts and bankruptcies, are also displayed.

Landlords use this credit check to determine whether or not a consumer is a good risk. A person with good credit is more likely to pay their rent than a person who has bad credit. The apartment credit check may even reveal whether or not the consumer has been evicted or had a home in foreclosure.

An important component of the credit check is the credit score. The credit score scale runs from 200-800, with a score of at least 600 indicating good credit history. Credit bureaus calculate the credit score based upon the consumer’s history of responsibly managing debt. By not taking on more debt than they can afford to pay back and making timely payments, it’s possible for consumers to build a good score.

A person with bad credit will have a score that falls below 500. A low score is the result of too much borrowing and not paying bills on time. However, a low score does not mean that it’s impossible to rent an apartment.

It might be helpful for the prospective tenant with bad credit to obtain recommendations from previous landlords. This could be a letter that provides the landlord’s contact information and attests to the tenant’s reliability. Letters from the prospective tenant’s employer and their bank may also be helpful in this situation. Or there is always the option of apartment communities that do not require a credit check.

Consumers dealing with credit issues may benefit by being upfront with prospective landlords about their situation. They may be able to explain the circumstances behind negative items on their credit report. A letter that explains the situation may go a long way toward convincing the landlord to take a chance. When all else fails, the prospective tenant may offer to pay a higher security deposit or additional extra months’ of rent.

People who have no credit may also find it difficult to rent an apartment. People who have no credit typically do not have credit cards, nor have they ever had a car loan or a mortgage. Because of this lack of credit history, landlords find it difficult to reliably predict what kind of tenant the consumer will be. Those who have no credit may be asked to find a cosigner on the apartment. A cosigner is frequently a family member whose good credit vouches for the tenant. It may also be helpful for the tenant to point to a steady work history as a good indication of stability.

Before beginning the apartment search, the consumer can obtain a copy of their credit report to review items on it. If they discover negative entries, they can draft an explanation letter telling landlords about the circumstances that led to the negative item. This way, when the landlord runs the apartment credit check, they have already heard the consumer’s version of events.

A credit check is a method through which landlords may predict whether or not a consumer will be a good tenant. Consumers who pay bills on time should have no problem qualifying for apartments, while people with bad credit or no credit may have to take extra steps to get approved. Knowing what to expect can go a long way toward ensuring success when renting an apartment.

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