If you’re trying to get approved for an apartment with bad credit, you’ll need to show you’re responsible in other ways. You could offer a guarantor with good credit, put down a larger security deposit, or provide proof that you have a steady income.
In this article, we’ll go over these strategies to help improve your chances, even if your credit isn’t great.
What Does It Mean to Have Bad Credit?
Bad credit means your credit score is lower than most landlords or lenders consider acceptable. But what does that mean for you?
Let’s break it down.
Your credit score is a reflection of your financial health, usually ranging from 300 to 850. If your score falls below 580, it can signal to landlords that you might be a higher risk.
(Image source: creditrepair)
This can happen if you’ve missed payments, accumulated debt, or gone through bankruptcy, which all show up on your credit report.
So, why is this important when renting?
Well, a bad credit score can make it harder to get the apartment you want. Landlords might worry about late payments, which can make it tougher to get approved for an apartment.
However, there are ways to improve your chances, even with bad credit. We’ll walk you through those options below.
How to Get Approved for an Apartment With Bad Credit
Here is how you can get approved for an apartment with bad credit.
1. Provide a Strong Proof of Income
Proof of income is basically your way of reassuring a landlord that you can pay rent each month, even if your credit isn’t perfect. It shows that you have a steady flow of money to cover your rent, which helps build trust.
Now, when it comes to showing proof of income, there are a few common documents you can use:
⦿ Pay Stubs:
Pay stubs are one of the simplest and most reliable ways to prove your income. If you’re employed, you probably receive a pay stub with each paycheck. These stubs show how much you earn before and after taxes, along with any deductions like insurance.
What makes them useful is that they give a regular, clear view of your income, making it easy for a landlord to see what you make.
Now, if you’re self-employed, you can still create pay stubs for yourself.
These work just as well to show that you have a steady income, whether working for a company or running your own business. In either case, pay stubs help reassure the landlord that you have a consistent way to cover rent.
⦿ Offer Letters:
If you’ve recently accepted a new job but haven’t started yet, an offer letter can serve as proof of your upcoming income. This letter from your future employer details your job position, salary, and start date.
It’s a solid way to give the landlord confidence that once you begin your new job, you’ll be able to cover the rent without any issues.
⦿ 1099 Forms:
As a freelancer or contractor, you don’t get regular pay stubs like someone with a 9-to-5 job. Instead, you receive 1099 forms from clients or companies that pay you for your work. These forms summarize your earnings for the year.
Having multiple 1099s shows how much income you’ve made, primarily if you work with different clients. They’re a great way to prove your earnings and give the landlord a good understanding of your financial situation.
⦿ Tax Returns:
Another useful document is your tax return. Just like the above, tax returns also provide a full summary of your income over the year. Whether you’re self-employed or working for a company, they show exactly how much you earned.
The documents you will need typically include the 1040 form for your overall tax filing. If you’re employed, one of the most important documents is your W-2 form.
This form, provided by your employer, details your total earnings and tax withholdings for the year.
2. Find a Guarantor
A guarantor is a person who promises to pay the rent if you are unable to. They act as a safety net for the landlord, making sure the rent gets paid no matter what.
So, who can be a guarantor?
It’s usually a close family member, like a parent, sibling, or even a trusted friend. The key thing is that this person has good credit and a stable income. Landlords want someone financially reliable since they’ll be responsible if you miss payments.
That’s why it’s best to ask someone who’s in a solid financial position and willing to back you up.
Now, how does it work?
If you miss a rent payment or can’t pay in full, your guarantor will step in and cover the cost. It’s a big responsibility, which is why landlords feel more secure knowing someone else is financially backing you.
For you, it means a better chance of getting the apartment, even with a bad credit. Just make sure to have an honest conversation with your guarantor to see if they’re comfortable with this.
What about the documents?
Just like you, the guarantor will need to show proof of income and a good credit history.
3. Offer Excellent References
(Image source: Flex Jobs)
References are people who can speak about your past behavior, whether it’s in a previous rental situation or even in your professional life. Landlords use these references to get a sense of what kind of tenant you’ll be.
While bad credit might raise a red flag, having someone confirm that you’re reliable and trustworthy can ease those concerns.
Who Should Be Your Reference?
The best people to ask for references are former landlords, property managers, or even your employer. These individuals have seen you handle responsibilities firsthand and can vouch for your dependability.
For example, a previous landlord could confirm that you always paid rent on time and took good care of the property.
On the other hand, if you’ve never rented before, an employer could highlight your strong work ethic. This will show that you can manage responsibilities well in different areas of your life.
How to Ask for a Reference:
When asking for a reference, be clear about what you need. Let them know you’re applying for an apartment and would appreciate their support.
A past landlord might write a letter that highlights your on-time payments. They could also mention how well you kept the property and your overall behavior as a tenant.
This makes it easier for them to focus on what matters to landlords.
Here’s an example of a recommendation letter:
Providing strong references reassures landlords that you’re someone they can trust.
4. Offer Additional Financial Security
Offering additional financial security can greatly boost your chances of approval. Here’s how you can provide that extra security:
⦿ Pay a Larger Security Deposit:
One effective way to offer additional financial security is by paying a larger security deposit. Security deposit is money you give to the landlord at the start of your lease to cover potential damage or unpaid rent.
By offering more than the standard amount, you provide extra assurance that you can handle potential issues. This can make the landlord feel more confident renting to you, even with a less-than-perfect credit history.
⦿ Prepay Rent:
Another option is to prepay several months of rent upfront. For example, if you can afford to pay the first three or six months in advance, it shows that you have the funds to cover your rent.
This not only reassures the landlord but also demonstrates your commitment to meeting your financial obligations.
⦿ Co-Signers:
If you can’t provide a guarantor, a co-signer might be another way to offer financial security. A co-signer is someone who agrees to take responsibility for the lease along with you.
They are legally obligated to cover the rent if you can’t make the payments.
Just like a guarantor, a co-signer should have good credit and a stable income. This arrangement can make landlords feel more confident about renting to you.
⦿ Purchase Renters Insurance:
Renters insurance covers your personal belongings and provides liability protection in case of damage or accidents. By purchasing renters insurance, you’re showing the landlord that you’re serious about protecting both your property and theirs.
Here’s a quick overview of what this insurance covers:
(Image source: How Much Net)
The insurance can be an added layer of security that demonstrates your responsibility.
Now, to make your application stronger, it’s important to show clear proof of income. We’ve talked about different methods for this, but if you want an easy way to get your documents, PaystubHero can help.
Obtain Proof of Income Documents with PaystubHero
Whether you’re applying for an apartment or need to prove your income, having the right documents is important. PaystubHero makes it easy to get pay stubs, offer letters, and other income paperwork with just a few clicks.
No hassle, no complicated steps – you get everything you need right away.
If you’re ready to improve your rental application, PaystubHero is here to help. Click here to quickly get your pay stubs, offer letters, and more.
FAQs
Below are the most frequently asked questions about getting approved for an apartment with bad credit.
