Submitting a rental application for an apartment requires providing landlords and property managers with a lot of information. Your credit will factor into any decision regarding approval. In 2020, the average renter in the U.S. had a credit score of 638, in an analysis of over 5 million applications by RentCafe. What does this mean in regard to how to get approved for an apartment? We’ll explain in detail below.
You might wonder, what exactly are landlords looking for? Obviously, they want to know how good you are at paying off debt and the likelihood you will pay rent on time. The application and decision-making process isn’t much unlike applying for a loan. It requires looking at your financial history.
How High Does My Credit Score Need to Be?
The ideal score for renters varies. Generally, you shouldn’t have trouble getting an apartment if your credit score is in the very good to excellent range. Nonetheless, the average credit score for an approved applicant trends higher for higher-end buildings, and can change over time.
Approved applicant scores vary by location as well; the most competitive city in 2020 was San Francisco, where renters needed a credit score of at least 719, Boston (716), and New York (715). Minneapolis was in the top 10 at 688. By comparison, Los Angeles renters had an average score of 682 and San Diego renters a score of 680. Cities with some of the lowest average renter credit scores included Arlington, TX (580); Las Vegas, NV (584); and Indianapolis, IN (590).
Apartment Rental and Your Credit Report
Your credit score isn’t the only thing landlords check, so don’t panic if it’s not perfect. They’ll also look at your credit report for information such as:
- Defaulting on loans
- Late credit card payments
- Collections accounts
Tenant screenings can also include reviews of your employment history, contacting provided references, and performing criminal background checks.
Can I Still Rent an Apartment with a Low Credit Score?
If your credit score is low and you’re wondering how to get approved for an apartment, you can still show you’re a good candidate. Your options include:
- Showing proof you’ve always paid rent on time (you’ll need at least six months of check images or bank statements).
- Proving your income is at least three to four times that of your rent.
- Paying more upfront, for example, by offering a few months rent in good faith.
- Getting a letter of recommendation from your previous landlord.
- Using a lease guarantor (cosigner) if you have no credit or never rented an apartment.
- Explaining the steps you’ve taken to overcome financial setbacks.
- Applying with a roommate, which can increase qualifying income and creditworthiness, or move in with someone who has a lease.
Look Within Your Budget
Rent should account for no more than 30% of your gross monthly income. Landlords use similar calculations to determine rent-to-income ratio. The general formula is to divide your gross annual income by 12 and multiply the answer by 0.3, to get your maximum monthly rent. If you earn $60,000 per year, an application for an apartment that costs $1,500 in monthly rent may not be approved. Keep in mind your debt (including credit cards, auto loans, student loans, and others) will be reviewed as well.
How to Prepare for Your Rental Application
Whether you can postpone a move or are planning a future one, take steps to improve your credit. Just a few months to a year of making on-time payments and paying down debt can help. Also work on paying off late accounts. Keep checking your credit score to see if you’re meeting your goals.
Also look for ways to improve your credit. These include applying for a credit card, asking for higher credit limits, paying on time or using autopay, and asking your landlord or utility company to report your payments. Lastly, check your credit report often for late payments on credit cards/loans, breaking an apartment lease, or other negative information.
Seek Credit Repair to Qualify for an Apartment Lease
Want to know how to get approved for an apartment when negative information or errors are impacting your credit? American Credit can help. We understand what landlords and property leasing companies are looking for in applicants’ credit and financial records. If you have late payments, collections, charge offs, judgements, tax liens, bankruptcies, or other negative details on your credit report, let us do the hard work. We’ll analyze your situation, use a pre-litigation process to get creditors to report information correctly, and request the credit bureaus investigate the accuracy of each account.