Can You Be Denied an Apartment Because of Bad Credit?

Bad credit can hurt your chances of obtaining an apartment.

Whether you plan to rent until your credit score improves enough to purchase a home or whether you simply find renting less stressful than owning your own home, your damaged credit can stand in the way of obtaining your dream apartment if your landlord denies your rental application based on your bad credit history.

Landlords Check Credit

While not all apartment managers run credit checks on applicants, most do. Landlords perform credit checks in an effort to minimize financial losses. Individuals with poor credit scores who failed to pay creditors in the past are more likely to leave their apartment rent unpaid than consumers whose credit histories reflect responsible financial behavior.

Past Evictions

Depending on the rental property you apply for, your landlord may pull your credit scores or evaluate your complete credit history. Different rental companies look for different warning signs within your credit history in addition to your score that indicate you present a higher risk to the company. One such "red flag" is a past eviction.

Evictions are public records that appear within your credit report. Even if you have a decent credit rating, a past eviction within your credit history indicates that you violated the terms of a previous rental contract--making a landlord less likely to approve your application.

Before Apartment Hunting

By pulling a copy of your credit report before you begin your apartment search, you can review your credit history for errors that negatively impact your scores and work to correct those errors. The Fair Credit Reporting Act provides all consumers with the right not only to access one free credit report each year, but to formally dispute any credit information that is inaccurate or that they do not recognize.

Pulling a copy of your credit report yourself also allows you to see what your landlord will see--giving you the opportunity to explain the past financial mistakes that damaged your credit before your landlord reviews your history.

Renting with Bad Credit

Just because a landlord can deny you an apartment as a result of your poor credit history doesn't mean that he will. Offering to pay several months' rent up front or providing the landlord with a larger deposit sometimes can offset the risk the landlord incurs by renting to an individual with a poor credit rating. Smaller, privately-owned and operated apartment complexes are typically more open to working with individuals that do not meet their credit requirements than larger, corporate facilities.

References

• "Los Angeles Times": Renting an Apartment with Bad Credit Isn't Easy
• CreditReport.com: Credit Reports and Renting an Apartment--What You Need to Know
• Federal Trade Commission: The Fair Credit Reporting Act (Section 611 and 612/p.45-52)

Resources

• Federal Trade Commission: Credit Repair: How to Help Yourself
• MSN Money: 7 Fast Fixes for Your Credit Scores