How to Rent Your First Apartment With No Credit
Renting an apartment or house without any credit is possible, but it can make the process more difficult. It’s common for landlords to check the credit of any prospective tenants to get an idea of how likely they are to pay their monthly rent. Because your credit score shows people how reliable you are when it comes to repaying debts, it’s difficult to assess how financially responsible you are without one.
If you have no credit, you should expect to jump through a few extra hoops to get an apartment, such as getting a co-signer or putting down a larger deposit. This will help prove your trustworthiness and financial stability while removing some of the risk of renting to you for potential landlords. Depending on the landlord, that may be enough to land a lease.
If you can, it’s best to put your housing hunt on hold while you build credit. However, if you don’t have a few months to spare, there are a few things you can do to find a place to live:
Table of Contents
- 1 1. Be Open About Your Lack of Credit
- 2 2. Consider Getting a Roommate
- 3 3. Find a Cosigner
- 4 4. Show Proof of Income
- 5 5. Provide References
- 6 6. Share Your Transcript
- 7 7. Pay a Bigger Security Deposit
- 8 8. Move in Quickly
- 9 9. Start With a Month-to-Month Lease
- 10 10. Rent From a Private Owner
- 11 11. Include a Personal Letter
1. Be Open About Your Lack of Credit
Try to use your lack of credit to your advantage. There’s no evidence that you’re credit-worthy, but there also isn’t evidence that you’re irresponsible or unreliable. Essentially, having no credit makes it easier for you to start cultivating healthy credit habits and avoid falling into bad ones altogether. Since you’re a blank slate, any positive acts you do will have a significant and quick impact on your efforts to build credit.
Renting an apartment with bad credit is far more difficult and expensive. Bad credit is evidence that you can’t be trusted. It’s harder to put a positive spin on your credit history when there are negative items, such as bankruptcies and debt collections, littered throughout your credit report.
Be honest and confident as you explain your financial situation. Landlords will probably be more understanding than you think, especially if there’s a valid reason you don’t have any credit yet. Even if you’ve already gotten your first credit card, it still takes time to actually build up your credit.
2. Consider Getting a Roommate
Consider finding a roommate who already has some credit history to go in on an apartment with you. Not only will this bring down the cost of your rent, but if your roommate has good credit, then you’ll be covered for the apartment.
Often, landlords only check the credit of one of the tenants. If they do a credit check on both of you, having one person with good credit on your lease can go a long way in proving that you’ll be good tenants.
If you do want to get a roommate, sign a separate lease. That way, you aren’t on the hook for their rent or utility payments. Further, if your roommate damages the property or breaks the lease, only their credit (and living situation) is at risk.
3. Find a Cosigner
If you don’t have any credit and don’t want to live with roommates, find someone to be a cosigner on your apartment lease. A co-signer basically is somebody who says, “If this person doesn’t pay their rent, I will.” This provides a safety net for your landlord since somebody else can step up if you fail to pay rent.
While this does solve your problem of getting an apartment, it can put a loved one in a tough situation. They have to take full responsibility for your rent payments if you’re unable to do so. They have to pay your bills if something bad happens to you, and if they can’t, then it’s their credit that takes the hit.
Asking loved ones for financial assistance can strain your relationship, even in the best of times. If you do choose to get a co-signer, be sure it’s somebody you trust and who will work with you if things go bad.
4. Show Proof of Income
Your credit report isn’t the only tool to prove your financial standing. If you have a stable and good-paying job, use that to prove you can afford the apartment. Landlords often look for steady employment that pays about three times the monthly rent. This is typically a requirement for renting an apartment, no matter what your credit looks like.
A savings account with a high balance may also be enough to convince the landlord that you can manage the rent. You may not be able to make rent payments directly from that account, but if you have several months’ worth of rent saved up, it can show that you’re a financially sound tenant.
During the application process for an apartment, take a copy of your pay stubs or bank statements to show you can handle the rent. It’s especially helpful if you have worked for a long period of time, showing the stability of your job.
5. Provide References
Alongside proof of income, include references or letters of recommendation in your rental application. Having other people vouch for your trustworthiness can go a long way. Find people who you have helped or proved yourself to, and ask them to write a letter of recommendation for you.
Employers are a great option for this, as they can verify your income as well as your stability — both great indicators for a prospective landlord to see. Other good choices for recommendations can be old teachers, bosses, neighbors, and family friends.
Explain to them that you are wanting to show how responsible you are and how that will extend to being a good tenant. Things landlords are going to look for include:
- Meeting deadlines;
- Handling responsibilities on your own;
- Taking care of other people’s property;
- Other signs that you are a safe bet with their investment.
Honesty is always the best policy when it comes to letters of recommendation. A sincerely glowing reference will give more credence to your application and make you a stronger candidate.
If you’re a college student or a recent graduate, share your transcript with your landlord. Your transcript may not be representative of your finances, but it can show that you’re a reliable student who would make an equally reliable tenant.
Keep in mind that this strategy will only help if you have good grades; a poor academic history probably won’t demonstrate your overall responsibility or dependability.
7. Pay a Bigger Security Deposit
If you’ve got enough saved up, offer to pay a larger security deposit or several months’ rent upfront. Money talks and even the most hesitant of landlords may be more inclined to take on somebody with no credit if they know that they won’t lose money.
The reason landlords want responsible tenants is so they don’t lose out on money. Rental properties are an investment, and landlords don’t want to jeopardize that with tenants who don’t pay rent, trash their property, or abandon it altogether.
Without any credit, it’s hard for landlords to know if you’ll pay your debts back on time and in full. By offering to put down a bigger deposit or advanced rent, you lessen their risk of losing money on their investment and have a chance to showcase your financial responsibility.
Before agreeing to this arrangement, make sure your finances are sound enough to take on this heavy initial burden. You may get your deposit back when you move out, but housing can be costly. You might be looking at a payment of several thousand dollars. You may want to delay using this negotiating tactic until:
- You are certain you’ve found the best available apartment;
- You’ve tried every other tip and trick listed here;
- You’ve offered to use direct deposit as a guarantee of on-time payment every month;
- You’ve offered to pay a larger security deposit upfront, but not several months’ rent.
Offering more money can be effective, but once a landlord knows you’re willing to pay more, it can be hard to get them to agree to anything less. This may work once or twice, but it’s in your best interest to start building a positive rental and credit history. That way, you won’t have to resort to doing this again.
8. Move in Quickly
Vacant rentals can cost landlords money every day there isn’t someone renting the space. Chances are, they want to fill that space as quickly as possible. If you let them know you are ready to move in immediately, you could get into a rental despite your lack of credit.
Depending on the landlord, this could create other obstacles — such as non-refundable deposits or additional rent upfront — but if not, it’s a quick way to get into an apartment.
9. Start With a Month-to-Month Lease
Similarly, you may be able to relieve your landlord’s fears of a messy, unreliable, long-term tenant by starting out with a month-to-month lease. This is far preferable to either trying to evict or deal with a poor tenant who has a year-long lease.
The eviction process is lengthy and difficult for tenants and landlords alike. Even if your landlord has a good reason to evict you, it can take months to actually get you out of their property. They lose money each day they have a tenant who doesn’t pay rent or damages their property. A short-term lease gives your landlord the opportunity to cut ties if you end up being a bad tenant, without going through the hassle of an eviction.
A month-to-month or short-term lease can benefit you, too. If the situation sours and you do get evicted, that could stay on your credit report for the next seven years, which isn’t exactly helpful if you’re trying to build credit.
Even if things don’t get that dire, you can use this time to prove your trustworthiness as a tenant. Then, you can negotiate more favorable terms when it’s time to renew your lease or look for a better place to live.
10. Rent From a Private Owner
If you can, try to rent directly from a private landlord, rather than a large apartment complex. Property management companies tend to have rigid requirements all tenants must meet before they can move in. At a minimum, property managers will almost certainly conduct a credit inquiry, if not a full background check. You’ll have a hard time arguing your case if they don’t like what they find and reject your application.
It’s far easier to work with an individual property owner. You can get to know each other on a more personal level. Depending on what they look for in a tenant, they may be more concerned with how much money you make than your credit history.
Further, someone who owns a single rental property as a way to earn passive income has a far greater incentive to find a tenant as quickly as possible. They don’t have the same resources as a large company or apartment complex. Each day their property is empty, they lose money. They may be willing to take a chance on you, regardless of what your credit history looks like, to start earning money again.
11. Include a Personal Letter
Finally, consider including a personal letter with your rental applications. Just like a college essay, this is an opportunity to show that there’s a person behind the numbers in your application. You can use this letter to discuss why you don’t have any credit and explain why you’re the ideal tenant. It may not sound like much, but a short letter can go a long way in distinguishing yourself from other applicants.
Remember that these strategies are all short-term solutions to your credit issue, even if they work for you. Once you do get your apartment, make an effort to be a great tenant so you can build a positive rental history and get a great reference for future housing from your new landlord.
All the while, you should still work on building your credit. Having good credit is crucial, and it’ll make it that much easier to get another apartment or house when it’s time for you to move.
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Ben Allen is a freelance content creator and digital marketer who believes in helping small businesses succeed. He spends his free time bragging about his two daughters, eating stuffed crust pizza, and playing video games.