Experian, TransUnion and Equifax now offer all U.S. consumers free weekly credit reports through AnnualCreditReport.com.
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Renting an apartment isn't the same as taking out a loan, but you can generally expect a credit check when you apply for a lease.
It's important to check your credit regularly, but especially before applying to rent an apartment, because knowing your credit standing can help you determine your chances of getting approved. Here's how to do it.
How to Check Your Credit for Free
You can get a free copy of your own credit report every 12 months from each of the three credit reporting agencies (Experian, TransUnion and Equifax) through AnnualCreditReport.com. Alternatively, you can get free access to your credit report and FICO® Score☉ through Experian.
If your credit is in great shape, you'll likely have a good chance of getting an apartment application approved. But if your credit report has some negative items, it's a good idea to work on addressing them before you submit your lease application.
Why Do Landlords Check Your Credit?
While you're not borrowing any money with a lease agreement, your credit history can help landlords determine how likely you are to make on-time payments every month. As a result, landlords typically run a credit check to review your past borrowing and repayment habits.
Landlords typically look for certain items that indicate you could be a risky tenant, including:
- Past-due payments
- Collection accounts
- Rental history
- Debt inquiries
- Bankruptcy status
They may also run separate checks to view your criminal history, evictions and other factors that may impact your odds of getting approved.
What Credit Score Do You Need to Rent an Apartment?
There's no universal minimum credit score required to rent an apartment. Credit requirements can vary based on the landlord, location and other factors. If you've found a listing you like, ask the landlord about their credit expectations before you apply to avoid wasting time and save yourself the application fee, if applicable.
While some landlords prefer renters with good credit, a score in the fair or very poor range won't necessarily disqualify you from finding an apartment. As you check your FICO® Score, here are some ranges to help you know where you stand:
- Exceptional: 800 to 850
- Very good: 740 to 799
- Good: 670 to 739
- Fair: 580 to 669
- Very poor: 300 to 579
Good credit or better typically means you manage your credit relationships well, while fair credit may mean that you've made one or two credit missteps in the past. If you have very poor credit, it could mean you have some significant negative items on your credit report, which could make it difficult to get an apartment.
Options for Renting an Apartment When You Have Bad Credit
If your credit score isn't in good shape or you don't have a credit history at all, it can be challenging to find a landlord willing to lease an apartment to you. Here are some things you can do to offset your bad credit and hopefully alleviate a landlord's concerns:
- Pay more upfront, such as a larger security deposit or one or two months' worth of rent.
- Have a creditworthy cosigner apply with you.
- Find a roommate who has good credit.
- Show documents that prove a responsible rental history, on-time utility payments and consistent income.
- Provide letters of recommendation or references from previous landlords.
- Search for apartments that don't require a credit check.
Also, consider asking the landlord if they have specific requirements for tenants with bad credit. Depending on your financial situation and rental history, it may take more time to find the right fit, but it is possible.
Tips for Improving a Bad Credit Score
If you have time before you need a new apartment, try to work on improving your credit before you start looking at listings. Checking your credit report will give you an idea of which areas you need to address, but here are some specific steps you can take:
- Pay on time. If you have any credit accounts with past-due payments, get caught up as quickly as possible, and make it a goal to make every payment on time going forward.
- Keep credit card balances low. Your credit utilization—your card balances relative to your total credit limit—is an important factor in your credit score, and the lower your balances are, the better. A utilization ratio above 30% will start to hurt your score; those with the top credit scores keep their utilization percentage in the low single digits.
- Dispute fraudulent information. In rare cases, a credit report can include information that resulted from fraud. If you find something you don't recognize, consider disputing it with the credit reporting agencies to have it removed or corrected.
- Avoid new debt. Multiple credit inquiries in a short period can be a sign you're struggling to manage your budget and leaning on debt to make ends meet. It's essential to apply for credit only when you need it.
As you take these steps and address other issues you find on your credit report, you may be able to improve your chances of getting the apartment you want.
Use Your Utility Accounts to Boost Your Credit Score
Utility and phone payments historically haven't been included in your credit score, but with Experian Boost®ø, you can get credit for on-time payments with those accounts, which can raise your FICO® Score.
Simply connect the bank accounts you use to pay your utility and telecom bills, and verify the positive payment history that you want to have included in your Experian credit file. Once you've completed the process, you'll see your new credit score instantly.
A higher credit score can make it more likely you'll be approved for the apartment you want, so continue to practice good credit habits and check out Experian Boost to improve your chances.