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You may have heard that prospective landlords check credit scores before renting an apartment to a tenant. That’s true. But a number of things could drive down your credit score, and simultaneously, leave you looking for a new place to live. It’s not a good situation.
There are a number of reasons you may be apartment hunting with a low credit score:
- Foreclosure or short sale
- Job loss that prevented you from paying loans and has forced you to find a cheaper place to live
- This is your first apartment, and you have a short credit history
Whatever the situation, take heart. The team from MyMove.com has some apartment hunting tips and tricks, even if you have a low credit score, a foreclosure or a bankruptcy in your credit file.
Apartment-Hunting Tip #1:
Find out how bad it really is. – Pull copies of your credit reports from all three major U.S. credit bureaus: Experian, TransUnion and Equifax. Improve your credit score quickly by clearing up any inaccuracies in your credit report, including on-time payments marked as late, closed accounts that are still open, and other mistakes.
Apartment-Hunting Tip #2:
Set realistic standards – If you were on the borderline of good credit, give the credit bureaus a month to update your information. With your real credit score in hand, you can begin narrowing down your apartment choices. You’re probably not moving to that upscale apartment complex with the heated pool and rec center if your FICO score is 550.
Highlight apartments within your price range that will be likely to rent to you. Landlords with individual apartments or duplexes may be more flexible than the landlord of a big apartment building. One of many good landlord tips is to ask prospective landlords if they run a credit check.
Apartment-Hunting Tip #3:
Consider private houses/apartments – Many people rent rooms or even entire apartments within their home. They are not landlords by trade, just individuals looking to defray the cost of their mortgage. They are less likely to go through the hassle and expense of running a credit report, and may judge you based on your character and current employment status. While landlords in large apartment complexes have less flexibility to make exceptions, private individuals may follow their gut instincts.
Apartment-Hunting Tip #4:
Gather evidence – If your credit score is low, you may be able to show other evidence that you are a good credit risk. Letters from previous landlords or records of on-time utility payments can help. You might also provide a documented employment history shows you are earning the money to pay your rent, and have been for some time. You can also have employers, colleagues, or past landlords provide “character reference” letters. The more evidence you gather that shows you are a good tenant and a good credit risk, the better.
Apartment-Hunting Tip #5:
Be prepared to plunk down a lot of cash. – When all else fails, money talks. Many landlords want first month’s rent, last month’s rent, and a security deposit. If you can add another one or two month’s rent onto that total, you’re showing the landlord that you’re serious about the apartment and you’re probably a good risk.
Get Ready to Move
Your credit score is simply a number that helps lenders and landlords guess whether or not you are a good credit risk. Once you either minimize that risk with lots of cash, or prove that you’re likely to pay your rent in the future, you can start packing because you’ll be moving very soon.
And don’t forget to complete a change of address form with the Post Office. This will ensure your mail gets forwarded for a year – and you will get some great coupons and offers too!
Update for 2015: Proposed changes to the FICO scoring model may make it easier to you to rent an apartment with thin or no credit history.
This post was contributed by MyMove.com, your online resource for moving advice, moving coupons and news and events in your new neighborhood.