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, but there are some solutions to credit score issues that 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. At the same time, foreclosures and tighter lending criteria have also sent one-time homeowners back to the rental market and kept others renting longer. This has made landlords to be extra careful when it comes to check and approve any application.
But luckily here at beycome we have found ways for credit-challenged consumers to win a landlord or property manager’s approval.
Remember this is not a magic recipe, these are simple strategies that will help you prevent and be well-prepared:
<strong><em>Address Credit Issues Before You Look.</em></strong>
Before setting up showings or filling out rental applications, order your credit report if you do it like with someone or online, so you can check on errors before handed and see what issues might raise red flags with landlords.
Also something that has help many is to include a letter of explanation with the application, somewhere where you elaborate a bit more on the reasons why your credit its in such a shape.
<strong><em>Be Prepared to Pay a Larger Deposit.</em></strong>
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 because it offers financial security since the reason for pulling credit to rent to somebody is to make sure they’re financially responsible.
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 crave on stone.
<strong><em>Demonstrate Strong Income</em></strong>
Spending 35 percent of income on rent is considered ideal for owners but in many cases, tenants apply for properties that will eat up a 40 percent or more of their income.
Staying within your affordability range also ensures that you’re less likely to stretch yourself too thin and potentially damage your credit again in the future.
<strong><em>Collect Recommendations from Your Employer or Past Landlords</em></strong>
It’s normal that owners request recommendation letters from your employer or past landlords, so you can give an awesome first impression by collecting them and putting your recommendations letter in advance in your application, sometimes these steps create the impression that you’re in good shape and you want to do everything to turn the situation to your advantage
<strong><em>And Finally, Consider Getting a Co-Signer</em></strong>
Having a cosigner to guarantee rent payments can help build trust with landlords, especially if you’re a recent graduate moving into your first apartment, however this person needs to have a very good credit or the landlord is not better off than, before, right?