Most Americans have gone through the process of applying for their first apartment. Completing the paper or electronic application, checking off every task box, and waiting for the property management team to review the information. Then comes the income and credit verification process. Wondering why or how they do that process? Look no further, as we have the information for you!
How do Apartments Verify Your Income & Credit Score?
During the application process, property managers and apartment communities verify income and credit by using different resources, including:
Landlord Associations: Organizations including the National Association of Independent Landlords offer tenant credit reports for free. Depending on the association, these credit checks may count as a hard inquiry and can cause credit scores to take a slight dip temporarily.
Credit Bureaus: Equifax, Experian, and TransUnion offer several credit screening products for the rental market, which require applicants to initiate the credit check, which normally counts as a soft inquiry.
Tenant Screening Services: These services offer credit reports to landlords, while others don’t.
During the income verification process, tenants would need to provide and submit at least 2 months’ worth of pay stubs, a tax return, or a bank statement to show they are capable and reliable of paying their monthly rent on time. Want to know what the average credit score is? Read here to learn more.
Why is My Income & Credit Score Needed for an Apartment?
Most, property managers, landlords, and apartment communities require credit checks and income verifications during the rental application process. The reason is that without those two pieces of critical information, property managers wouldn’t have any type of confirmation that you would be able to pay your monthly rent on time every month. It’s the same process when you apply for a mortgage or a car.
How to Rent an Apartment if You Have No Credit
If you happen to not have an established line of credit and looking for your first apartment, you would be able to ask a reliable family member to serve as a cosigner on the apartment lease with you. That way, you will be able to gain approval for the new apartment by having the income and credit verification covered. Not sure what a cosigner is? Our latest blog covers it.
If you have credit but it’s considered ‘Fair’ or ‘Bad’, you can still see if a cosigner is able to assist you during the rental application process. If that’s not an option, here are some ideas on how to move forward:
• Look for an apartment with a lower rental price so you can meet the income requirement.
• Check out another area (especially a suburban property such as our Forest Cove Community).
• Make a larger security deposit.
• Agree with the landlord/property manager to make advanced rental payments.
In the long run, it is best to ensure that you are making monthly payments to any/all credit cards, bills, and loan agreements to ensure you are increasing your credit score for future living opportunities. With a better credit score comes better opportunities for financing in the future.
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Visit www.chicagorentals.com to find your dream apartment or email us at info@chicagorentals.com to schedule a tour and experience the TLC difference today.
