How to Rent a Home with Poor Credit

Landlords usually check potential tenants’ credit scores before renting properties. They want to know if future renters are able to meet financial obligations. If you are searching for rental properties, having a financial history filled with defaulted and missed payments could hurt your chances. As such, a landlord could select somebody else to rent a property instead of you. However, there are many options for you to rent a home even with poor credit.

Know What Landlords Check

Credit scores have been dropping for the past several years to the current 664 average. Due to this, landlords have also lowered their credit rating policies in order to match consumer ratings. These credit rating policies vary per lender, as they have different criteria to choose potential tenants.

Another important aspect to consider is the local rental market conditions. For example, lenders on rental markets with high vacancy rates will have lower standards in comparison to highly competitive rental locations.

If you have a low credit score, there are lenders that are more flexible and check other financial information such as savings and employment status. Landlords simply want to check if potential tenants will be able to afford and pay rent.

Improve Your Rental Odds

Knowing what to do and being prepared is important to obtain a desired rental location. Here are six tips to help you get a rental home with poor credit.

1. Get recommendations. Providing letters of recommendation to potential landlords to show financial responsibility can assist with clearing landlord doubts about your ability to pay rent. If possible, get recommended by someone connected to your finances like banks, employers, or previous landlords.

2. Get a co-signer.  Having a co-signer on a rental contract is a good option if the co-signer meets the credit criteria. It’s important to know that if you missed your lease obligations, the co-signer could be held legally responsible by the landlord to pay your dues.

3. Search the rental market. Rental properties that have been vacant for long periods may have lower tenant requirements. Search the real estate market for landlord requirements for different locations to improve your chances.

4. Be honest. Being honest with landlords about your financial situation or past credit history is the best way to gain trust. Show potential landlords that you are financially responsible, regardless of past economic urgencies.

5. Provide employment information. Including a letter with employment details, while offering to schedule automatic deductions from your bank account, is another way to improve your chances of renting with poor credit.

6. Pay a higher security deposit. It might help you get a rental home if you offer a higher security deposit. Being able to pay several months in advance can show landlords that you are financial secure despite of past credit history.

If you have tried these six tips, but are still having a hard time getting a rental property, think about getting a roommate or moving in with family members until your credit score is improved. Even if it takes you longer to get a rental property with poor credit, there are many things that you can do to show that you are not a financial risk to landlords. Make a budget and plan to have your credit score improved based on responsible management of credit to avoid rental issuess.

This article is provided courtesy of Bad Credit Loans Direct, a consumer finance website providing information and tools on easy loans for bad credit and other personal credit services.