In every aspect of living, credit is relevant, and has been with everything you do. Buying a car, applying for a credit card or loan, setting up utilities, and applying for an apartment or house is not possible without having a suitable credit score. Finding the right apartment is a major step in life accomplishments, so whom do you ensure you pass the dreaded credit check? Let’s cover what credit is, how it impacts your living accommodations, and what can be done to find the right apartment with credit in mind.
What is Credit & Why is it Relevant to My Apartment Search?
In most cases, most applicants are required to have a minimum credit score of 650 to rent an apartment. In life, many things help determine your credit score, which can ultimately affect your chances of getting approved for a nicer apartment. Whether it is your first or fifth apartment, it’s important to remember the factors that can impact your credit score.
• Your overall payment history, since it shows how often you’ve paid your credit cards and loans over the length of your credit history.
• Which accounts are owed.
• The average age of your credit, which is calculated based on your oldest and newest account.
• Your new credit lines, since when you take out a credit card or loan, it can lower the average of your total accounts.
• Having a credit mix, which includes any mortgages, loans, credit cards, and other factors that may impact your score.
How Do You Know If You Qualify for Your Next Apartment?
Although the hunt for finding an apartment is the same, the process for how each property and apartment rental agency can differ. For instance, each company has its own standards for credit. In 2020, the average credit score during rental applications was 638. If you’re unfamiliar with credit scores, where does a number in the mid-600s stand against other applicants? Here is a credit score scale to determine the status of each credit score:
• Credit Scores between 300-579 = Poor
• Credit Scores between 580-669 = Fair
• Credit Scores between 670-739 = Good
• Credit Scores between 740-799 = Very Good
• Credit Scores between 800-850 = Excellent
Thankfully, there is no industry standard for apartments when they conduct a credit check. However, you can always call specific properties to see what they check for during the application process. The good news is you can check and track your own credit history if properties haven’t already to get an idea if they are at, above, or below the average credit score. One general rule of thumb is to always ask your chosen property if the credit check will be a ‘hard check’ or a ‘soft check’, as hard checks impact your overall score whether you qualify or not.
Helpful Tips for Renting an Apartment with a Lower Credit Score
While low credit scores may impact a renter’s apartment selection, it doesn’t mean they can’t find a place! Thankfully, there are ways to navigate around this potential hurdle and qualify for an apartment with a lower-than-average credit score, including:
• See if the property of choice doesn’t conduct credit checks.
• Consider properties that assess debt-to-income ratios versus set credit score evaluations.
• Take over a lease or sublet, which takes away the need for a credit check.
• Invite a cosigner during the application process.
• Pay a higher deposit or a higher monthly payment, which can negate the need for a credit check.
• Provide a letter, or letters, of recommendation.
If you’re seeking ways to help build or boost your credit health for better apartments in the future, here are ways to achieve it. For example:
• See if property management will report your on-time rent payments to the credit bureaus. When positive payments are reported, it will help boost your credit score.
• Don’t close any credit cards. Even if you think that closing an account will reduce the risk of increasing debt, it will negatively impact your score.
• Pay what you can as often as you can. The more you pay, the higher your score can be.
• Request a credit line increase, as having a larger credit limit can help increase your credit score. Keeping your credit utilization at 30% will help maintain your score or help it rise.
• Maintaining a lower debt-to-income ratio will help you control how much of your income is going toward your current debt obligations.
• Use autopay to prevent any missed payments.
We Work with You!
Since 1996, TLC has been dedicated to delivering everything apartment living should be. We understand how stressful the application process can be, which is why we are here to help you every step of the way. If you are ready to begin the adventure to find your next place to call home, please visit our site to view our available properties and rates, or feel free to reach out to us at info@chicagorentals.com with any questions.
