Is It Possible to Rent an Apartment with Low or No Credit?

Having good credit can be an important factor when applying to rent an apartment, but what if your credit score is far from perfect? Or maybe you have no credit history? While a better credit score can make it easier for your rental application to be approved, it is still possible to rent with low or no credit and establish positive financial habits to build your credit while renting.

Understanding Your Credit Score

Your credit score is designed to help creditors and others understand how you manage your money and how likely you are to pay your financial obligations on time. When you apply for an apartment unit, a property manager may consider your score to determine whether there is risk in renting a unit to you.

Factors such as late or missed payments, frequently carrying high credit card balances, only paying the minimum amount due, or owing a high amount of total debt may contribute to a lower credit score.

Before you start your apartment search, it’s a good idea to know where you stand. You can check your credit score and get a free credit report from each of the three major credit reporting bureaus — Equifax^®, Experian^®, and TransUnion^® — at annualcreditreport.com.

Don’t be discouraged if your credit score is lower than you had hoped — your credit score isn’t permanent. It changes based on your payment behaviors, so you can get back on track by making a plan and following personal finance best practices to help improve your credit score, including:

• Building your credit history through secured or store credit cards.
• Paying credit card bills on time and in full
• Keeping your credit card balances below 30% of their limits

Learn more ways you can build your credit score through Freddie Mac’s CreditSmart^®, a free online suite of financial education resources.

Once you’re living in an apartment, you can continue building your credit history by ensuring your on-time rent payments are reported to credit bureaus.

Finding an Apartment that Accepts Lower Credit Scores

Having a good understanding of your credit score before starting your apartment search may help you better navigate your apartment search process.

Many apartment buildings have firm policies around credit scores, others may not consider it at all, and many will have comprehensive applications that require other types of information like your past rental history. If you’re having trouble locating affordable housing options, a renter resource organization may be able to assist you in your search.

Building Your Rental Application

Your application is your chance to provide potential landlords a fuller picture of the type of tenant you’ll be. You may consider providing your rental history and references from past landlords or roommates. Living with a roommate or co-signing with a guarantor can also be good ways to help you get approved if a property manager believes you don’t have strong enough credit on your own.

Negotiating with Landlords

In addition to building your case in your application, you may be able to negotiate with potential landlords to overcome their credit score standards. Providing proof of income, offering to pay a larger security deposit, or paying an additional month of rent upfront, if your budget allows, can all be ways to secure an apartment when your credit score isn’t where it needs to be.

Your credit score can be an important factor when renting, but it’s not the only factor. With the right planning and execution, you can find a rental unit to call home while building your credit score to help you achieve your long-term financial goals.