A common question for those searching for their next home is “How can I buy or rent a house or an apartment if I’m not sure about my credit score or I have a really bad credit score?”. There really isn’t an easy one-size-fits-all answer. However, there are some solutions to credit score issues. These can help you better prepare to change that “I’m sorry you don’t qualify” to a “Here are the keys to your new house!”.
During the past several years, unemployment and other issues have slashed many Americans’ credit scores. Meanwhile, foreclosures and tighter lending criteria have also sent one-time homeowners back to the rental market. Some have stayed renting longer. This has made landlords be extra careful, especially when considering applicants who might have problems related to their credit score issues.
But luckily here at beycome we have found ways for credit-challenged consumers to win a landlord or property manager’s approval despite having credit score challenges.
Remember this is not a magic recipe. These are simple strategies that will help you prevent and be well-prepared to tackle difficulties with credit issues:
Address Credit Issues Before You Look.
Before setting up showings or filling out rental applications, order your credit report. If you do it like with someone or online, check on errors beforehand. See what issues might raise red flags with landlords who are cautious about credit score dilemmas. Also, include a letter of explanation with the application. In this letter, elaborate on the reasons why your credit is in such shape. People facing credit score dilemmas should consider this approach.
Be Prepared to Pay a Larger Deposit.
The only way that you might be able to get out from a denial stage will be to proactively offer a bit more of a deposit to the landlord. Paying a larger security deposit could help sway some landlords. It offers financial security since the reason for pulling credit to rent to somebody is to make sure they’re financially responsible. Offering a larger deposit can often be reassuring to landlords wary of any issues regarding credit score. Remember that the deposit covers the landlord’s losses in the case of damages, so a larger deposit gives them a little bit more they can put towards lost income. Just remember this is not craving on stone.
Demonstrate Strong Income:
Spending 35 percent of income on rent is considered ideal for owners. Nevertheless, in many cases, tenants apply for properties that will eat up 40 percent or more of their income. Staying within your affordability range also ensures that you’re less likely to stretch yourself too thin. This helps prevent potential exacerbation of challenges with credit scores again in the future.
Collect Recommendations from Your Employer or Past Landlords
It’s normal that owners request recommendation letters from your employer or past landlords. You can give an awesome first impression by collecting them. Put your recommendations letter in advance in your application. Sometimes these steps create the impression that you’re in good shape. Showing you want to do everything to turn the situation to your advantage can help overshadow any credit score issues.
And Finally, Consider Getting a Co-Signer
Having a cosigner to guarantee rent payments can help build trust with landlords. This is especially true if you’re a recent graduate moving into your first apartment. However, this person needs to have very good credit. Otherwise, the landlord is not better off than before, right? A co-signer can often mitigate the concerns landlords may have about your credit score.