Bad Credit Problems & Renting

Bad credit can make it more difficult to rent property.

Bad credit problems -- such as late payments, collections and bankruptcy -- can become an issue when renting a house or an apartment. People with bad credit typically can't get mortgage loans and have to rely on rental housing. Some landlords are hesitant to rent to people with credit problems.

Pre-Screening

Instead of completing rental applications only to have your application denied because of poor credit, speak with different landlords and ask them directly if bad credit will affect your chances. Some landlords are OK with renting to people with a poor credit history as long as they're on time with monthly rent payments.

Rental Reference

If you've rented other apartments or houses, and you've never missed a monthly rent payment or submitted a payment late, ask your previous landlord to supply a reference letter on your behalf. Retain several copies of this letter and show this information to future landlords.

Proof of Income

Earning adequate monthly income to make the rent payment may compensate for bad credit problems. Prepare in advance and make copies of your yearly tax returns or most recent paycheck stubs before beginning the house or apartment search. If necessary, ask the landlord to contact your employer to verify income.

Get a Roommate

Add another person's name to the rental application to help you qualify. Having someone with good credit on the rental agreement may persuade a hesitant landlord to approve your rental application. If a roommate isn't an option, ask the landlord to accept a co-signer -- someone who becomes responsible for the rent if you default.

Security Deposit

Be ready to negotiate with potential landlords. Offering a higher security deposit on the house or apartment, or negotiating a higher rent payment, may convince them to approve your rental application.

Sub-Lease

Sub-leasing or taking over a lease for a friend or relative can help you find a rental if credit problems remain a roadblock. You can move into the place without completing a rental application or having a credit check and take over the rental payments. The person who signed the original lease agreement remains responsible for the property.

References

• CNN Money: Rent with Bad Credit; Amelia Ross; September 2010
• OH My Apartment: Renting an Apartment Despite Bad Credit; January 2010