Thanks to the recession and the less than buoyant property market in this country more of us than ever are being forced to rent or are choosing to do so for fears that the value of our property still might fall; or will not see the returns that we would ideally like. For many people, renting is unavoidable. Thankfully, there are many options to choose from in the rental market. However, if you have imperfect credit, you might be in for a shock, and a denial or two. These days more and more landlords will carry out in depth credit checks before accepting people as tenants; at the same time letting agencies increasingly require people to have credit background checks so they can ensure payment.
What your credit says about you
Your credit history sums up your entire financial life on a few pages, and spits out a score deeming you worthy or unworthy of consideration. Bad credit means a higher risk to property owners wanting assurance that they will get a timely rent payment, without fail. The more adverse your credit is, the higher the chances of a landlord rejecting your application. Any tme you have ended up in debt or missed credit repayments you will have run the risk of accruing a negative score. Any time that you have managed to use and repay credit successfully then you will have potentially improved you credit rating.
What the landlord thinks
When it comes to renting out apartments or houses, it usually isn’t your landlord’s first rodeo. It doesn’t matter whether you’re looking at 2 bedroom flats to rent in London or a house to rent in the outer Hebrides; most landlords have taken the risk of renting to tenants with imperfect credit before, and they have been burned for their kindness. When a landlord looks at a potential tenant with bad credit, he or she automatically begins considering whether or not you will leave without paying your last month’s rent or the likelihood of eviction for non-payment. Neither scenario is one the landlord prefers because both cost money. If he or she has another tenant in the wings with better credit, you will probably hear a “no.”
However, bad credit isn’t necessarily a death sentence on your rental application. There are four pro-active steps you can take to improve your chances, even if your credit is subpar.
- Ask prior landlords for letters of recommendation. Focus on your character, not your credit history.
- Find a co-lettor or roommate with excellent credit.
- Get copies of paid utility bills or cell phone bills spanning 12 months to show that you do pay your bills, even if your credit report isn’t pretty.
- Be ready to pony up some extra cash in lieu of good credit. Sometimes landlords will take additional deposits or pre-paid rent and lease to you, if you have cash on hand.
Renting an apartment when you have bad credit is tricky, but not impossible. Check your credit before you start looking for your new place to avoid any potential hassles or pitfalls before you move.