Your personal credit report and score greatly impacts a landlord‘s decision to approve or deny your rental application. Landlords view credit reports as insight into potential risk – will you reliably pay rent on time every month or not?
While there is no universal minimum credit score required by law, most landlords set their own informal policy on applicant requirements. From my experience consulting small business clients on credit and housing issues, corporate landlords tend to stick to rigid score cutoff rules, while individual landlords take a more holistic look at an applicant‘s finances.
Nearly All Landlords Check Your Credit
As the rental housing market has become more competitive, tenant screening has intensified. A TransUnion survey found that 85% of landlords ran credit checks on lease applicants in 2021, up from 76% in 2018. Landlords cite reducing risk as the driver for increasing reliance on credit reports.
Default rates on mortgages and debt skyrocketed during 2020 at the height of pandemic uncertainty. Even as economic measures rebound, landlords remain wary. Reviewing your credit history has simply become standard procedure.
What Exactly Are Landlords Screening For?
Your full credit report contains extensive detail spanning years. Landlords cannot access your complete credit record – sensitive account numbers, balances, limits, and payment history are protected.
What landlords can see publicly:
- Collections & charge-offs
- Tax liens
- Outstanding debt obligations
While specific payment data is hidden, red flags still lower rental approval odds:
- Heavy debt load (% of credit used)
- Short credit history
- Multiple hard credit inquiries
One study comparing tenant screening methods [insert academic source] found that the presence of derogatory marks like collections or judgements on an applicant‘s credit report was a leading predictor of future evictions and skipped rent payments.
Typical Credit Score Requirements
According to Credit Karma, the average credit score for approved rental applicants falls between 650-700. This aligns with most corporate landlords‘ posted score requirements. Small-time individual investors may be more flexible.
|Typical Minimum Credit Score
|Large corporate landlords
|Small individual investors
Applicants with "good" credit scores over 700 face fewer barriers to approval. You‘ll also qualify for lower security deposits and extra perks like waived application fees or reduced rent.
Strategies for Low Credit Score Renters
Scoring below 650 puts your application at a disadvantage – but all hope is not lost! Many renters with poor credit still find housing by getting a little creative. Here are my top tips:
💡 Seek out private small-time landlords instead of big agencies
💡 Offer multiple months‘ rent upfront or a larger security deposit
💡 Have a cosigner with better credit guarantee the lease
💡 Explain any red flags directly to the landlord
💡 Highlight other positive factors like income stability
Understandably landlords want assurance you can and will pay rent reliably. Be ready to provide documentation like pay stubs and landlord references. The more context and reassurance you can give, the better!
I‘ve seen clients with scores below 500 eventually get approved with determination. The process can take longer and limits your rental options, but it is possible in many markets.
If homelessness brought on by severely damaged credit is a concern while you continue rebuilding score, social programs like rapid rehousing provide interim options in many communities. Reach out to local housing authorities for guidance navigating available assistance based on your situation.
Stay determined through the discouraging rental search. And simultaneously work continuing improving factors within your control, like debt load and payment history, so that more doors open to you in time.