Being turned down from renting an apartment due to a poor credit score is a very frustrating experience, to say the least. Fortunately, there are ways around that situation, and this article will share some of them with you here.
Credit Rating for Renting an Apartment
First, a little background information on what your credit rating (FICO Score) is comprised of. Your credit report consists of payment history, amounts owed, how long you’ve held credit and how much credit is presently extended to you, as well as what types of credit you have. All of that data comes up with your score. FICO scores run from 300 to 800; the higher your number, the better your credit rating.
The good news is that your credit score does not contain the following information:
- Your employment information, including salary
- How much money you have in your bank accounts
- Your age
- How much money you have in your savings or checking account
- Whether you pay child support or alimony or receive public assistance
This is “good news” because whether your credit blemish was a past bankruptcy, owing money on a rental lease that was prematurely broken or a few late payments on a car loan, it may give you an opportunity to prove that you are capable of paying your monthly rent.
Overcoming Past Problems
A common problem today is unemployment. For example, say a couple of years ago you were unemployed and during that period of unemployment, you had several late payments on your car loan. Since then, however, you have been gainfully employed in a secure job setting and even though the past late payments are still showing up on the credit report, your payment history has been perfect for approximately a year.
What you could do is ask your present employer for a reference letter as proof of employment, along with salary information and the fact that your job is very secure.
Willingness to Put Down Extra as Security Deposit
For instance: You won the marital home as part of a divorce settlement, but shortly thereafter lost your job. As a result, you could no longer afford timely mortgage payments, but were fortunate enough to work something out with your mortgage company that allowed you to sell the home on your own, instead of going through a foreclosure. However, shortly after selling that home (at a good profit), you applied for an apartment at a beautiful new complex in town, but your application was rejected because a foreclosure inadvertently showed up in your credit report.
A paper trail is very important, but in this type of circumstance, it might not be readily available. The key words here are you sold the home at a good profit. More often than not, offering to pay an extra amount on your security deposit, or 6 month’s rent in advance will do the trick, however, if you are still unemployed at the time of your application, a co-signer may be necessary as well.
In general, networking with family and friends and seeking out apartment rentals in owner-occupied buildings. The chances are good that at one point the private landlord has been where you are and therefore will empathize with your situation. Plus, they are not governed by the corporate rules and regulations that large leasing companies must abide by.
Of course, once you are set up and organized in your new apartment, it might be a good time to clean up and organize your credit situation as well, in order to avoid a similar situation.