Renting with Bad Credit: 11 Options to Consider

Renters may worry that their credit history can impact their ability to find the right place to live. No matter what’s happened in your financial history, having a less than stellar credit score can often seem worse than it is. The good news is that renting with bad credit is possible and there are a few key strategies to help make the search easier. We’ll outline some strategies on how to rent a home even if you have bad credit so you can find your next apartment or house for rent.

11 options for renting with bad credit

Generally speaking, credit scores fall into five categories:

1. Poor: 300-579
2. Fair: 580-669
3. Good: 670-739
4. Very Good: 740-799
5. Excellent: 800-850

A "bad credit score” is typically anything below 670. If you fall into this category, know that you have options. Though it may seem impossible to compete with other renters with higher credit scores, even people with credit issues have plenty of options to find a good rental.

If you’re unsure of your current credit score, you can get your score for free by using a service from your bank, credit union, credit card company, or another provider. Be sure to get your credit score from all three credit bureaus - Experian, Transunion, and Equifax - for a more accurate credit report.

You can also see your full credit history for all three credit bureaus once per year using a free credit report service. This way, you’ll see exactly what’s bringing your score down, such as high credit card debt, outstanding credit card balances, late payments, and/or bills in collections. Once you know why you have a poor credit score, you can implement ways to improve your credit score.

In the meantime, there are eleven strategies you can use to make your rental application stronger, even with a bad credit score. Depending on your income, savings, and rental history, some strategies will be easier than others. Keep in mind that all these strategies take planning on your part to make them work.

1. Find a landlord who doesn’t need a credit check

It’s true that most of the time, landlords perform credit checks. However, landlords in areas with fewer renters— think rural and suburban areas— may be less concerned about your credit score. In these cases, landlords will likely want some proof of your renter worthiness. So be prepared to present your proof of income, good rental history, and references from employers and past landlords.

Beware of landlords who make it too easy for you to get an apartment. If your landlord doesn’t want much information about you, you may be walking into a rental scam or an unfavorable rental situation. Always perform your due diligence when responding to a rental listing.

2. Ask a real estate agent about your options

Real estate agents have lots of knowledge about your rental market, especially agents who work with landlords or property managers. You can contact a brokerage and ask to speak with an agent with experience working with landlords. When you find the right agent who does, ask about your options or if they know of any apartments that don’t need a credit check. It’s also a good idea to ask if they know a landlord who is willing to work with you.

Working with an agent is common in some rental markets, even when looking for apartments or rental units. You’ll likely pay a finders fee to the agent when you find the right place. Your cost is usually a percentage of the annual rent, which can cost anywhere from a few hundred to a couple of thousand dollars. So be sure you choose an agent who has experience working with tenants with low credit scores.

3. Prove your income and savings

The reason landlords want renters with a good credit history is that those renters have proven their financial trustworthiness. When you have a low credit score, you need to be prepared to use other ways to show your ability to pay. You can either show a high income or high savings amount relative to the monthly rental payment. Ideally, you can show both. Let’s take a closer look at these strategies.

Let’s say the rent of your ideal apartment is $1,500 a month. You want to show that you make at least 40 times your monthly rent as a yearly income. In this case, you’d need to show you make at least $60,000 per year. You can do this by showing your pay stubs for the last few months or even the last year. If you’re transitioning to a new job, consider showing the offer letter from your new employer detailing your new compensation.

Ideally, you also want to show that you have at least three months of rent payments in your savings account after paying your move-in costs. For this example, you want to have $4,500 in cash in your account, not in an investment account. You can show this by providing bank statements or printing an account balance at your local branch office. An alternative is providing a screenshot of your account, but the more official you can make it, the better.

If you have credit cards, you can also show a credit line available to you as extra security. For example, if you have a credit line of $10,000 on a card with a zero balance, you can show your prospective landlord that you have an extra $10,000 to fall back on for other costs. This won’t always work and may not help if you have little savings or are carrying high balances on your credit cards. But it can be a little extra to highlight your strengths as a renter.

4. Explain your poor credit history

Being honest and open about your low credit report is a good way to show your trustworthiness and personal responsibility to a landlord. Depending on your location, you may want to discuss it with your potential landlord before submitting your application or presenting a letter along with your other application materials.

Present your credit history with confidence and clarity. It’s not uncommon to experience a credit hiccup. You don’t need to explain everything, just enough to convey that you know what the problem is (or was) and how you have and continue to address the problem. Be ready to answer questions from your landlord. If they have questions, it’s a good sign that they’re open to taking you on as a renter.

5. Highlight how you’re addressing credit issues

If you’re presenting a letter of explanation, be sure to explain how you’re addressing the problem. A great way to do this is by showing how your credit score is already increasing. You can do this by setting up credit tracking with a free service. Many credit card companies already offer credit tracking to their customers. If you’re working with a credit counselor or credit repair company, you can also show how long you’ve been working with them.

If you aren’t yet addressing your credit problems, it’s time to start. No matter what your score is right now, improving your credit score is possible.

6. Consider paying more upfront

If you have the cash to pay more upfront, this can be a useful tactic to secure a rental when you have a poor credit report.

One option is offering to pay more than the usual first month plus a deposit, such as paying three months' rent upfront. This shows your landlord that you're both serious and responsible, considering it takes budgeting skills to build that kind of savings. Alternatively, you can provide a larger security deposit, depending on if your state and local laws allow this practice.

When negotiating rent, stay positive and professional. Many, but not all, landlords are investors. They’re likely interested in getting good deals and maintaining positive cash flow. Show that you care about their pain points and their bottom line. It may go a long way in transforming their impression of you from a person with a bad credit report to a renter who wants them to be profitable.

If they’re not interested in upfront payments, ask them what would change their mind. You never know when something as simple as covering the snow removal costs or mowing the lawn each week may change their mind.

7. Offer to have automatic payments for rent.

Setting up autopay for your rent payments is a simple but effective way to convince a landlord that you mean business. You’ll need to show that you have the funds, and you’ll also need to use a system that is easy to present to the landlord.

For example, if you set up an automatic payment through your bank, you should present both a receipt and show that you have plenty of money in your bank account to ensure you can make those payments. Your landlord may have a preferred payment method, so ask them how they’d like to receive the automatic payment.

8. Showcase positive references from previous landlords

Next to showing that you have plenty of money to cover costs, a glowing reference from another landlord (or several) is a great way to prove that you’re a safe bet as a tenant. Of course, this only works if you have a good relationship with a past landlord. If you do, simply reach out to your landlord and ask for a letter of recommendation.

While you’re at it, you can ask your old landlord if they have a rental unit that would be suitable for your new apartment. You never know if they may have something opening up in the area you want with all the features you need. And, because they already know and trust you, you may be able to get into your new place without jumping through so many hoops.

9. Be a co-tenant

Renting with a co-tenant, like a roommate, is a great way to strengthen your application. Just be sure that your roommate can show the creditworthiness that you lack. Having a roommate may be useful for people who have a high income with poor credit. You should still be prepared to offer a letter of explanation and recommendations from past landlords.

Even though living with a roommate may not be your ideal situation, there are many positives to consider. Your roommate will certainly lower your overall housing costs since you’ll be splitting rent and utilities together. Just be sure to take your time and find the right roommate for your needs.

10. Use a co-signer

One of the most common ways to bolster your rental application when you have a low credit score is to use a co-signer. A co-signer, sometimes called a guarantor, is a person who agrees to take financial responsibility if you fail to pay rent. Typically, a parent or other family member acts as a co-signer. There are some important things to keep in mind when using a cosigner.

First, your co-signer will need to show a good (ideally “very good”) credit score of their own. They will also need to show proof of income. Many landlords want to see a co-signer who makes at least 80 times the monthly rent amount in yearly income. Lastly, you’re entering into a financial relationship with your co-signer. If things go wrong, such as you defaulting on rent payments, your relationship may be strained. So choose and act wisely when working with a co-signer to get an apartment or rental home.

The good news is that, so long as you’re a responsible tenant, you should be able to build a positive relationship with your landlord by the end of your lease. That means you may be able to forgo using your co-signer when renewing your lease or get a great reference from your landlord for your next apartment.

11. Establish credit if you don’t have any

Sometimes it’s not bad credit standing in your way. It’s just that you have not built any credit. Everyone starts off with no credit, so the good news is that while your overall credit score won’t prove your creditworthiness, it also won’t prove that you’re not trustworthy.

Establishing good credit is possible. And you can do so fairly quickly. The fastest and easiest way to do so is by being added as an authorized user to a trusted person’s credit card account. This option is great for two reasons. First, adding someone as an authorized user is very easy to do, and you’ll see the account show up on your credit report in 30 days or less. Second, the person adding you to their account doesn’t have to give you a physical card. They can simply add you, and when the card comes in the mail, they can hold onto the card.

Takeaways when renting with bad credit

While it may seem intimidating at first, you can rent a home with a bad credit report or even find a reputable apartment that offers no credit checks. There are plenty of strategies to help build your credit, make a good impression on a potential landlord, and ease the burden of the rental process.

Redfin does not provide legal, tax, or financial advice. This article is for informational purposes only and is not a substitute for professional advice from a licensed attorney, tax professional, or financial advisor.