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How to Rent an Apartment With No Credit

By Kelly Boyer Sagert · January 03, 2023 · 7 minute read

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How to Rent an Apartment With No Credit

Many landlords will only consider prospective tenants with decent credit scores. However, some private landlords who are eager to fill empty rentals quickly may advertise “no-credit-check” apartments. In other cases, smaller family-owned buildings just don’t have the same documentation requirements as bigger complexes handled by property managers or brokers. Even if the building you’re interested in does require a credit check, there may be ways to get around it.

If you have bad credit or no credit, we’ll explain all the ways you can still rent an apartment.

Are There No-Credit-Check Apartments?

A handful of landlords will rent an apartment without a credit check. However, apartment hunters should approach advertised “no-credit-check apartments” with caution. The term can sometimes be code for “these units are problematic,” or “this landlord is difficult,” or even “this is a scam.”

Sometimes, however, private landlords in smaller buildings just don’t see the need for credit checks. They don’t advertise this, but “for rent by owner” (or FRBO) listings can offer a clue.

Instead of pulling a credit report themselves, some landlords will accept a credit reference with the rental application. Credit reference documentation can be a recent credit report that the tenant provides (saving them from paying a fee), or pay stubs and W-2s, or letters from previous landlords or lenders — basically, anything that shows your ability to pay the rent.

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Why Landlords Perform Credit Checks

Landlords perform credit checks for apartment rentals for the same basic reason that employers run credit checks for employment: to help determine a prospect is financially responsible.

Landlords want tenants who pay their rent on time. By checking an applicant’s credit report, a landlord can see how reliably the person pays their bills and manages their credit. If someone has a history of late payments or outstanding debts, a landlord will think twice before renting to them.

When landlords run a credit check, it will be a soft credit inquiry, which won’t affect your credit score.

How the Process of No-Credit-Check Apartments Works

Depending on the landlord, the application process for a no-credit-check apartment can be pretty standard or very casual. Landlords generally ask for the following as part of your application:

•  Proof of identity

•  Proof of employment, income, or financial stability

•  Vehicle information, if parking is provided

•  Personal references

•  Application fee

Typically, it takes one to three days to process an application. Afterward, you’ll be given a lease to sign. At this time, you can negotiate the security deposit, move-in date, and any details such as minor repairs to be made. When you receive the keys, the place is yours.

Where To Find No Credit Check Apartments

You can find no-credit-check listings in print, online, or via signs on some buildings. No-credit-check apartments are usually not handled by a hired property manager or broker. Instead, they are managed by a private landlord (the building owner) who needs to have rent continually coming in to cover the costs on their property.

Some of these landlords are less particular about their prospective tenants. Others trust their instincts about people over credit and background checks. And others still, as noted above, just don’t want to deal with the hassle and fees associated with credit checks.

Tips for Renting an Apartment With No Credit

If you’re looking to rent an apartment (or house) but you have no credit or bad credit, here are some tried-and-true strategies.

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Be Honest

No one likes an unhappy surprise. If you haven’t established credit yet, say so. If you have credit problems, say so. Have a conversation with the landlord before you apply to gauge their flexibility and forewarn them of red flags in your credit history. Then include a cover letter with your application repeating your explanations. Glowing reference letters also help offset a poor credit score.

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Get a Roommate

Finding a roommate with good credit can help make the deal go through. A landlord may accept using their name alone on the lease (assuming the roommate is OK with taking full responsibility for rental payments). Or you may be able to put both your names on the lease.

Look for Sublets and Shares

Sometimes, a leaseholder will “sublet” their apartment while they pursue opportunities elsewhere. This allows them to return to their former home in the event they want to move back. Rather than paying rent to the landlord, the subletter will often pay the leaseholder, so financial documentation may not be required. This is a common arrangement in big cities, especially among leaseholders of rent-stabilized apartments.

In share situations, roommates who are on the lease may sublet an extra room without requiring much, if any, documentation. As long as you make a good impression, they may give you a chance.

Find a Cosigner

A cosigner is someone who promises the landlord to cover your rent if you cannot pay — usually a good friend or family member with great credit. Cosigners may or may not live in the apartment.

Pay a Higher Security Deposit

If you’re brainstorming how to rent an apartment with bad credit and no cosigner, consider laying some cash on the line. Putting down several months’ rent as a security deposit can reassure the landlord.

Show Financial Proof

Perhaps you make a decent income that will make it easy to pay your rent. Or you saved up some money as a cushion. Share proof with the landlord in the form of pay stubs and bank statements.

Use Previous Landlords as References

If you’ve rented from other landlords and made those payments on time, bring a reference letter or two to prove it. Ideally, the reference should be on letterhead or at least look neat and professional. That might mean creating the letter yourself and having your previous landlord sign it.

Promote Yourself

If you’re in sales, theater, or marketing, use your superior presentation skills to persuade your landlord what a great tenant you’ll make. Turn on the charm. Bring homemade baked goods. It works.

Build Your Credit History

If there’s somewhere you can stay for now — with a friend or family member — spend that time building your credit history. To build up poor credit, focus on paying bills on time, paying down credit card balances, etc. During this time, it may help to sign up for credit monitoring. What qualifies as credit monitoring varies by service, but look for one that offers alerts whenever your score changes.

When you have no credit, you can start to build your history by becoming an authorized user on a credit card or putting a utility in your name. Just be aware that it may take six months for the system to generate your credit score. You can find out your credit score for free from Experian, via AnnualCreditReport.com.

The credit score needed to rent an apartment varies by landlord, but the average required score is about 650.

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The Takeaway

If you haven’t yet established credit or have a problematic credit history, no-credit-check apartments are one option. However, there are many other ways to secure a rental, from finding a sublet or share situation to paying a higher security deposit. Beware of shady no-credit-check apartments: There’s no reason to settle for an unsafe or unhygienic environment just because of your credit score.

With the free SoFi Insights money tracker app, you can see all of your financial accounts on one mobile dashboard. Plus you’ll get free credit monitoring. Track your spending and savings to get a bird’s eye view of your finances.

Stay on top of your finances by seeing exactly how your money comes and goes.

FAQ

What happens if you don’t have credit but want to rent an apartment?

Let the landlord know up front and ask what you need to do to rent the apartment. Their suggestions may include getting a roommate or cosigner with good credit, or to put down a larger security deposit. If you’ve rented in the past and made payments on time, ask your previous landlords for reference letters and build a case about why you’ll make a great tenant.

Can I rent an apartment with collections?

If you’re planning to rent a no-credit-check apartment, then the landlord won’t consider issues on your credit report. If your credit will be checked, talk to the landlord up front to see if renting with collections on your report is somehow possible.

What’s the minimum score to rent an apartment?

It’s up to the individual landlord, although 650 is a general benchmark. If a landlord requires a “good” credit score, FICO considers that to be in the range of 670-739.

I’m wondering how to pay rent with a credit card, no fee. What can I do?

If you’re renting right now, ask your landlord. If you’ll be seeking an apartment to rent, ask prospective landlords if this is possible. Each landlord has their own policy about credit cards.


Photo credit: iStock/StefaNikolic

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