Let’s be even realer: some of us have bad credit. So what should you do if your credit history is less than stellar?
Here are seven ways you can walk in with a poor score and walk out with a signed lease:
1. Find a guarantor or co-signer
This is both the easiest and most complicated approach — ask a trusted friend or relative with good credit to co-sign the rental application with you.
It’s easy because while you’ll be the only one living in the apartment, your co-signer agrees to cover the payments in the event that you default on your rent. This can provide a landlord the extra reassurance he needs.
Of course, it’s complicated because someone else is on the hook for your good behavior; you don’t actually want your co-signer to be forced to take over payments for you, so make sure the monthly rent is an amount you can afford comfortably. Be realistic about what might happen to your relationship if you default on the lease.
2. Be honest and show progress
Sometimes, bad credit isn’t a reflection of bad money management. You may have lost your job, suffered from medical problems, or experienced another financial setback that was out of your control.
If this is the case, be upfront about it — before the landlord even runs your credit check. Your willingness to admit and own up to your bad credit is a point in your favor.
It also helps demonstrate the steps you’ve taken, and are currently taking, to fix the problem. Whether it’s a proven track record of paying your bills on time or references from recent landlords, this will show your prospective property manager that you’re responsible and committed (even if your credit isn’t perfect).
3. Pay in advance or increase your security deposit
Bad credit makes landlords nervous because it indicates you might default on the rent. By paying a month or more in advance or offering a two-month security deposit, you can alleviate their concerns.
Not only does this show your commitment, but it also provides them with extra cash that can cover some of the losses and damages should you skip out on the rent. (Which, of course, you won’t.)
4. Get a roommate
Willing to share your living room and kitchen? Find a roommate. If the landlord will allow just one person to sign the lease, see if your roommate is willing to sign it solo. (Alternatively, try to move in with a roommate who’s midlease.) This way, the person on the lease is the one with more solid credit.
Roommates come with another benefit: you’ll be able to share the bills. By reducing your financial burden, you can continue to pay down your debt and repair your bad credit faster — a true win-win!
5. Show solid income and offer to pay via direct deposit
Even if your credit history is a little shaky, being able to show a history of regular, solid income can go a long way toward making a landlord feel better about you.
When applying for an apartment, have proof of income ready, such as recent pay stubs, tax returns, and even a letter from your employer verifying your employment status and income. Offering to have your rent automatically deducted from your bank account can also help.
6. Compromise by paying a little more
Some landlords — especially if you’re renting from a property management company —charge additional “risk” fees if your credit score is poor. You may want to consider taking the hit if you really love the apartment, or if you need to quickly find a place to live.
If you’re dealing with an individual manager who is inclined to deny your application, you may be able to negotiate a slightly higher rent as a gesture of good faith.
7. Bring recommendations
You’d bring letters of recommendation for a job application. Why not bring the same when you’re trying to rent?
Letters of recommendation can reassure a potential landlord that you’re a responsible person who won’t cause him any problems. Ask for letters from current and previous employers, current and previous landlords, and even past roommates who can vouch for your character. Even if your previous landlords were only for short-term arrangements, their endorsements can hold weight.
Author: Paula Pant
Original Article: http://www.trulia.com/blog/7-ways-to-deal-with-bad-credit-when-renting/?ecampaign=rnews&eurl=www.trulia.com%2Fblog%2F7-ways-to-deal-with-bad-credit-when-renting%2F