Home > Credit 101 > Can You Be Denied an Apartment Because of Bad Credit?

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The most well-known consequence of having bad credit is trouble getting loans or credit cards, but a low credit score can also make it difficult to find a place to live. Landlords, especially large property-management companies, will likely check your credit report before approving your lease, and there are plenty of negative items that landlords see as deal-breakers with potential tenants.

“Any time you’re dealing with any credit issues in the realm of housing, that seems that much more risky to a landlord,” said Ben Papale, a real estate broker in Chicago. Judgments, tax liens, collections accounts on utilities — those items are almost always nonstarters, Papale said, but medical collections and late credit card payments aren’t as problematic, in the eyes of a landlord.

Standards have changed a lot in the last several years, as credit problems became much more common due to the recession, which has also given renters the opportunity to explain the circumstances of their situations.

“A 625 by almost any landlord standard is considered good credit, and that wasn’t the case a few years ago,” Papale said of credit-score standards in the Chicago rental market.

Barry Maher, a property manager in Corona, Calif., said his tenant standards changed significantly during the recession. He said he never looked at applicants with bad credit, because he had plenty of people trying to rent from him whose credit reports were problem-free. Then, all of a sudden, all the applicants had a credit problem.

“I started looking at it more closely,” Maher said. “Particularly after the recession hit I had people who had declared bankruptcy, people who had lost their houses. … I was able to find some incredibly good people to rent to.”

While bad credit is likely to cause problems in your apartment search, there are a few things you can do to improve your approval chances. Maher and Papale shared what strategies tend to work best for bad-credit applicants trying to make their cases to landlords.

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Large management companies are less likely to consider applicants with bad credit, so you’ll want to look for a landlord who has a small operation, who maybe owns just a few units or properties.

“They’re a lot more open to considering special considerations,” Papale said. Large management companies are unlikely to make exceptions, because that opens them up to the possibility of getting sued if someone in a similar situation applies for an apartment and is denied, Papale said.

If you’re dealing with an individual, rather than a company, you may have an opportunity to tell your story and explain why you’d be a good tenant.

Make a Personal Appeal

Maher puts a lot of stock in personal interactions. He said he always makes reference calls himself — he said the one time he didn’t led to dealing with a terrible tenant, and he won’t make that mistake again — and he knows there’s a lot of value in meeting potential renters before making a decision.

“If they’re forthcoming and they actually meet with the person making the final decision, if they possibly can, and explain their case, they’re way ahead of the game,” Maher said.

Papale recommends renters with bad credit write personal statements to send in with their applications, to put the credit problems in context and make an argument for themselves.

Offer an Incentive

Personal connections may not be enough to persuade a landlord to look past the risk factors of taking you on as a tenant. If you offer to pay an additional deposit or a few months of rent in advance, that may be the assurance the landlord needs to approve your application.

Maher has worked out a variety of deals with bad-credit applicants, including a recent tenant who helped him out when he decided to sell the house she was renting.

“She was so good I ended up writing a strong recommendation to her,” Maher said. “Because she helped us sell the place, we gave her some money.”

He also accepted an applicant who offered to make improvements to the unit, because he had the skills to do so. Maher reduced his rent and supplied the materials in exchange for the work.

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There are some credit problems you can’t outweigh with an extra deposit. Papale recalled having an applicant who “defaulted on everything,” from his cellphone bill to student loans, and he couldn’t help him find an accepting landlord. Maher said he’ll discard an applicant who tries to cover up his or her credit problems.

“They’ll say, ‘I have perfect credit, here’s my credit score,'” Maher said. “I still run the credit check, and it’s an issue.”

It’s important to check your credit scores before applying for a rental, not only so you can address any credit issues you have proactively, but also to make sure you’re accurately representing yourself. Your score fluctuates constantly, so you don’t want to fill out an application thinking everything’s fine and have a landlord think you lied because he found issues with your credit report. You can get two of your credit scores for free on Credit.com, with updates every 30 days.

If you can’t get approved on your own, you still have some options. You can try to find a sublet while you try to improve your credit, and you can ask someone to co-sign your lease. If you have any outstanding issues with a previous landlord, take care of it right away, Papale said. Property managers give great weight to previous rental references, so if you had any problems, that’s something you’ll want to address upfront, as well.

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  • http://www.credit.com/ Credit.com Credit Experts

    Not sure what you mean by “two charges.” But there are ways to rent with a poor credit score. We discuss some in this post: How to Rent With Bad Credit

  • https://step1credit.com/ Andre Justin

    It is possible. It can be denied.

  • http://www.Credit.com/ Gerri Detweiler

    Have you talked with any potential landlords? Many know that not all renters have great credit and may be willing to work with you.

  • Strange situation

    I have a 718 FICO, have no evictions, criminal records, bankruptcies, etc and was denied due to having some closed out accounts years ago that should have dropped off my credit report. Have rented from a large national corporation in the recent past and can get an excellent recommendation from them and have never been late with a rental payment. Strange situation that I can get a mortgage but not an apartment rental.

  • Mike Fellman

    Pay off all your credit card debt. Continue to charge things here and there and pay them off immediately. (Before the next billing cycle). Open a few new cards but DO NOT CHARGE ANYTHING ON THEM, and DO NOT ACQUIRE ANY NEW CC DEBT. Your score will improve dramatically, and you will have no issues finding a place.

  • Rachel Elizabeth Flohr

    I fall into and awful grey area here. My credit would be fair to good (all revolving accounts paid faithfully every months, credit card, utilities, and car payment), but due to having cancer 3 years ago my credit score has been crippled due to medical collections. Now the place I’ve been living for 2 years is being sold and I have a glowing recommendation from the landlord but my medical collections cause me to be denied from renting an apartment. I’ve offered to move in right away, offered higher deposits, and offered to place just my significant other who can qualify alone on the lease (every place demands every occupant over 18 be qualified). They all seem to care only about the number and what’s angering me is several of the medical collections are paid, others I haven’t been able to get to work with me and I can’t afford to pay in full. I wonder if at this point I may have a case with fair housing for discrimination because I feel I am being rejected due to having had a medical condition I couldn’t afford. I have no idea what to do to avoid being homeless, I have no family in the area and am still trying to finish my degree.

    • http://www.Credit.com/ Gerri Detweiler

      I’m sorry to hear what you’ve been through both health wise and financially. Unfortunately I am not aware of any laws that would protect you from being turned down for an apartment because your debts are medically related. But you may want to look into state landlord tenant laws to find out for sure. I wish I could be of more help.

      • Wolfgang

        California is stupid. “Sorry, we see you have a $30 medical bill that was paid late in 1995, we won’t rent to you!” WTH??? Back East all you need is $400 an a handshake. Why does California have 20,000 requirements to rent a place?

    • Monique

      I am in the same situation as you. I moved to California from Pittsburgh, I lived in my house for 8 years, no evictions, I was a great tenant. Now I move here and I can’t even get a studio because of my credit score. I have always kept a job, and paid my rent. My student loans are what is destroying my credit. The credit check laws here are too strict and it makes it hard for honest hard working people who just want to live a quiet life.

  • itsme..

    Need an apt that accepts TRA!! Help!

  • R Jerome Harris

    Credit should have NOTHING to do with getting an apartment. It is a clever way to keep “certain people” out of certain areas. It is absolutely shameful that it has come down to this.

    • Jevon Antonio Grady

      Not only that but jobs also how can I have good credit if I can’t get a job to pay the bills on my credit?

    • Brandon Smith

      Why not? Landlords don’t want tenants who will end up defaulting on their rental obligations, as the process to evict them is time-consuming and costly, and recovering rent not paid isn’t guaranteed. Credit history has a lot to do with renting.

    • Culinary delights

      I completely agree with you! I am going through this right now. I just went through a two year painful and messy divorce and it took my credit with it. I have been denied everywhere I applied. I’m very discouraged and disappointed. It isn’t fair. They put way too much weight on the credit issue. Not everyone with bad credit is irresponsible with money. Credit can be damaged for many reasons. I can pay the rent. My income meets requirements. My current landlord can confirm I made all my rent payments on time. That should be all that’s required to rent an apartment. and not everyone with bad credit will have problems paying the rent. I totally agree that it’s a “weed out” mechanism. I think it’s completely unfair that just because some people are irresponsible, that everyone with bad credit should fit some one size fits all standard. Maybe it should go case by case.
      My mother told me when she was young in the 70’s and she got her first apartment, credit checks were unheard of. You just paid the money and moved in. There are no options now for people like me and it’s a tough spot to be in.

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