What is the Credit Score Needed When Renting an Apartment?

When renting an apartment is not always about budgeting and the area, you need to know your credit score also known as FICO score. This is a simple way a landlord will know if you’re creditworthy or a risk based on your previous financial history.

Credit Score Needed Renting Apartment

Why is it so impartment for a landlord to know your credit score if it’s only an apartment? Because it details your history of paying off debt on time and the landlord will use this to see how likely you will pay your rent on time. That means in the landlord's eyes those 3 digits will determine if you will get approved or not.

How Credit Score is Broken Down

 

A credit score is broken down into three categories; poor, fair and excellent. These three categories will determine if you will get approved for a credit card, home loan, and even a car loan. Credit scores range from 300 (poor credit) to 850 (excellent credit).

A credit score of 300 to 650 is usually poor, 651 to 699 is fair and 700 and up is considered excellent starting 2019, says Property Records in Los Angeles, CA.

How Do You Check Your Credit Score?

There are three major reporting sources, Equifax, Transunion, and Experian. Free apps like Credit Karma offer free credit checks without any hidden fees or string attached.  Checking your credit is called a soft inquiry which won't affect your score in a negative way, so check it as often as you like. In the other hand, a hard inquiry is when you apply for a line of credit and a potential lender reviews your credit information, this may hurt your score.

“Keeping up with your credit score and knowing what you need to work on is key to improving your score, many people think a poor credit score will go away on its own but in reality it wont,” says, Francisco Torres a financial advisor from iMoneyTree LLC in Los Angeles, CA.

The most common way of hard inquiries is often done when someone tries to apply for a credit card at department stores or electronic stores. Stores will lure in young people or the elderly with offers like ‘no fees for x amount of time’ but at the end, they end up paying more.

What is the Lowest Credit Score Needed to Rent an Apartment?

In a perfect world landlord’s will only rent to renters with excellent credit but that’s always the case. Anyone with a credit score of 600 and below will have a hard time getting approved, people with lower credit scores will likely have a high-security deposit and will have to pay 2-3 months rent up front. If we do the math for an apartment that’s $1,500 a month a person will a low credit score will have to pay $1,500 + $3,000 (security deposit) + 2 months rent up front of another $3,000, that will equal out to $7,000. For the average working family, $7,000 is a lot of money.

What to do if You Have Poor Credit to Avoid High-Security Deposit?

Having a low credit score isn’t the end of the world; actually, it’s pretty common for many college students with student loans to have poor credit. The goal is to work on it to make it better.

The best way to avoid ridiculous security deposits is to have a co-signer, this will help the landlord to feel more secure. Providing proof of a steady job and paystubs to prove you meet the landlord’s income requirements will help you avoid rejection.

“Making your landlord and property management company feel secure is the best way to avoid high fee and rejection” adds, Torres.