What credit score do you need to rent an apartment?
Credit scores and other rental requirements vary depending on where you’re looking and who owns the property. But having higher credit scores could put you in a better position.
Learn the role of credit in a landlord’s rental decision. And find out how to improve your credit to position yourself as a great tenant.
Key takeaways
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There’s no official or legal minimum credit score needed to rent an apartment. It can vary by region and the landlord’s policies.
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Landlords may also use tenant screening reports, with information such as rental history and employment verification, to make rental decisions.
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If you’re building credit, then getting a co-signer or guarantor, applying with a roommate, providing additional documentation or paying a higher security deposit may help you get approved.
How do credit scores affect renters?
Background checks for apartment rentals might also be referred to as resident screening reports or tenant screening reports. They sometimes involve credit checks. But the process is different from the inquiries related to loan and credit card applications. And apartment reviews may involve factors beyond your credit, such as your income.
But what if your potential landlord reviews your credit? Generally, the higher your credit score, the better. Credit-scoring company FICO® says that a score above 670 is a positive indicator. And anything below that might make your landlord “take a closer look at your credit details.” If you want to know where your credit stands, you can check your credit score before renting.
What landlords may look for on credit reports
Here are some of the things a landlord might look for on a potential renter’s credit report:
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Accounts in collections
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Bankruptcies
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Evictions
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Late payments
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Loan defaults
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Total debt
Tips for renting with new credit or bad credit
If you’re new to credit or have low credit scores, here are some ideas for improving your chances of being approved for an apartment rental:
Find a co-signer or guarantor
A co-signer or guarantor is someone who agrees to take responsibility for rent payments if you can’t make them. Typically, a co-signer is responsible for missed rent payments, while a guarantor is only responsible if you default on your lease or break it early.
Apply with a roommate
You may have a better chance of being approved with a roommate’s additional income and credit information taken into account, especially if they have good credit.
Provide additional documentation
Documents like an employer reference, on-time utility payments, bank statements, recent pay stubs and rental history may help assure landlords that you can make rent payments on time.
Pay a higher security deposit
Before moving in, many renters pay a refundable security deposit that can be withheld to cover unpaid rent or damage to the apartment. The deposit is often equal to one month’s rent. If your credit is less than ideal, you may be required to pay a higher security deposit.
Look for a private landlord
Some property management companies might automatically rule out candidates with poor credit. But private landlords and homeowners may have more relaxed renter requirements.
4 Ways to help improve your credit scores to rent an apartment
Check out these four ways to improve your credit scores before you apply to rent an apartment:
1. Pay on time
Your payment history is a significant factor in determining your credit scores, according to major credit-scoring companies FICO and VantageScore®. Setting up automatic payments is one way to help ensure you don’t miss a payment.
2. Keep your balances low
Your credit utilization ratio is the amount of credit you’re using versus your total available credit across all your accounts. A low credit utilization ratio can show that you’re using credit responsibly, which could help improve your credit scores. The Consumer Financial Protection Bureau (CFPB) recommends using no more than 30% of your available credit.
3. Pay more than the minimum
The CFPB also recommends paying off your entire balance each month, saying it helps keep your credit utilization down and strengthens your credit scores. It can also help you avoid interest charges, which can cost you more in the long run.
4. Only apply for the credit you need
Applying for new credit can trigger a hard credit inquiry. While one hard inquiry will generally only affect your scores by a few points, too many hard inquiries could have a more significant impact.
Credit scores for renting an apartment FAQ
Still have questions about renting and credit scores? Here’s more information:
Can I rent an apartment if I don’t have credit?
While being approved to rent an apartment can be more difficult with no credit history, it may still be possible. Strategies include using a co-signer or guarantor, applying with a roommate and paying a higher security deposit. You may also be able to provide additional documentation to show a landlord that you’ll be a responsible renter.
If you’re new to credit, you could consider using a secured credit card responsibly to establish credit.
What else should I consider before renting an apartment?
Most people’s largest expense is housing, according to the Bureau of Labor Statistics. Creating a budget could help you figure out what you can afford each month. It could also give you an idea of how to balance other bills and expenses with moving costs.
One potential moving cost is renters insurance. It can be relatively inexpensive compared to homeowners insurance. Some landlords even require it. But it could be worth investigating regardless. The CFPB says renters insurance covers “the cost of replacing personal belongings that are stolen, damaged or ruined in a home that is being rented.”
Do landlords do hard or soft credit checks?
If a landlord runs a credit check for an apartment rental, it could result in a hard inquiry. According to FICO, a hard credit check can temporarily lower your credit scores, but usually just by a few points.
Will a 600 credit score get me an apartment?
According to FICO, 600 is considered a fair credit score. FICO says a score above 670 is better. But acceptable credit scores can vary by region and the landlord’s discretion. And landlords may consider other factors, such as a person’s income, when judging rental applications.
Key takeaways: Credit scores for apartments
A landlord may consider a person’s credit score and history when deciding whether to rent them an apartment. If your credit is less than ideal, using a credit card for fair and building credit responsibly over time could help you build credit.
While you work on improving your scores, you can monitor your credit with CreditWise from Capital One. CreditWise is free for everyone, even if you’re not a Capital One cardholder. And using it won’t hurt your credit scores. You can also get free copies of your credit reports at AnnualCreditReport.com.
