Do you need good credit in order to rent?

[dczech09]

I just accepted a new gig for a workshop. The topic that I have been asked to speak on is credit. One of the questions that my customer would like me to research in depth is "do I need good credit in order to rent?"

This actually interests me personally as my sister is wondering the same thing.

So let's assume that someone is young (18 or 19) and has no credit history whatsoever. Would it be possible for them to rent without having to the credit score? I am sure that it varies based on the landlord/property manager. However, I would assume that if someone proved their income and did not have any debt, they could get approved for rent.

Any thoughts or personal experiences on this matter?

I will be reaching out to property managers in my area, however I wanted to post this on the forum as well.

[Regichka]

Actually you won't be approved. Been there, done there. In good apartments complexes with nice amenities, they want people with good credit. They asked me for cosigner. Of course in low maintenance apartments or from individual, more likely, but deposit can be anywhere from half of the rent up to 2 month rent, even just flat rate like $2000, even $3000.

[snafu]

Years ago I managed a small apartment bldg with only six suites. It was both expensive and difficult to get credit agency reports so I mostly relied on written confirmation of employment and income, references from previous landlord and responsible community leaders like Ministers, physician, supervisor, teacher/instructor etc. I also used a questionnaire. We asked for a guarantee from a parent if the candidate had no rental history. On the owner's instruction tenants on benefits had to have first and last months rent plus a damage deposit before getting keys.

The big rental agencies here use a couple of reporting agencies and once an individual is 'flagged' [credit, eviction, serious damage, problems, police intervention] it's tough to get accepted anywhere. Rentals are very tight here and it's definitely the landlord who is in charge.

[kork13]

Actually you won't be approved. Been there, done there. In good apartments complexes with nice amenities, they want people with good credit. They asked me for cosigner. Of course in low maintenance apartments or from individual, more likely, but deposit can be anywhere from half of the rent up to 2 month rent, even just flat rate like $2000, even $3000.

This is very accurate, unfortunately. In the end, it's a very big "IT DEPENDS" answer... but in general terms, nicer apartments and/or large-company-owned apartments will not rent to you without at least decent credit. Lower end apartments will often rent to you with poor or non-existent credit, but they tend to require higher upfront deposits. However, that's not a definite thing either. Sometimes perfectly good & nice apartments will accept proof of employment income, a history of paid bills (like for a cell phone), or other means of validating you're trustworthy enough to have as a tenant.

My experience: As a 21-y/o recent college graduate, I found an apartment with a couple friends to help share the costs. I had held a personal credit card--with no negative credit dings--through all 4 years of college, and had a sufficient credit history & score (not sure what it was, probably between 660-690 at the time) that they let me rent there no problem. Similar story for one of my roommates. But the 3rd roommate, who grew up in Venezuela, knew nothing about credit & had only ever used cash or a debit card. The apartment managers refused to allow the 3rd roommate on the lease (even with us other two)... So we ended up as "2 roommates + live-in guest". Ridiculous.

[Nika]

If you want to rent an apartment in a place like Manhattan, absolutely. A lot of apartments are owned by corporations and are managed by property agencies and have the same requirements -- 40x income, good credit. There is no negotiation on those points.

So when Dave Ramsey says "oh, if they don't want to rent to you without good credit, they are idiots and you don't want to rent from them anyway, there are plenty of others" is harmful. Yes, you do want to rent from them, otherwise your options are few and far between.

[scfr]

When we rented our last apartment (in our late 40's), yes, absolutely. They not only ran a credit check they asked for a copy of our tax return (possibly because my husband is self-employed). That was a larger complex with decent amenities.

However, back when I rented my fist place at 18, it was very much a "starter" apartment ... super small & old & in a so-so part of town owned by 2 brothers who were strongly rumored to be "made men." No credit check done. I would never have dreamed of being late on the rent with those guys.

Of course, things may have changed during the past many decades, but I'd guess that smaller places owned by individuals still do things differently than the big more corporate places.

So, for an 18 year old just starting out who in my personal opinion has no business looking at anything other than the most basic of places, it may not matter. Call me old fashioned, but it is a healthy reality check and builds character (and some street smarts) when you are forced to struggle a bit when you first move out of the nest. If you can't qualify for a "nice" place, so what? But that may not be what your seminar attendees want to hear

[ua_guy]

I agree with others, depends on location and the landlord/management agency.

The first apartment I rented on my own came with a hefty up-front deposit and the landlord required a cashier's check or money order for monthly rent.

I also had to pay a deposit to utility companies.

[TheKayla]

Agree, it depends on the landlord. Even with good credit though, you can be denied or required a guarantor based on income ratio alone. I have really good credit and had decent credit history by the time I got my first apartment at 19 because I had had a debit card ever since I got my first job, and my parents put my name on some of their debts in order to give me a good start with my credit score. I also had a start to student loans that I would pay on every now and then. Yet still, obviously being in college I made only a certain amount -- and while I kept my apartment budget in a healthy range, some places require income to be 2-3 times the monthly rent, which is near impossible for a college kid making $800/mo and having to find still cheap 1-2 bedroom for $500. Even though I had good rental history and excellent credit, I needed a guarantor most of the time or had to live in crappier places for the same price. Just shows how many different factors there are as well -- but yes, credit score is a very big factor. Not required, but basically necessary for most nicer places, expensive or not.

[llckll]

If you don't have good credit or credit at all, another option would be to have a co-signer on the lease.

I am totally against co-signing anything but I did co-sign for my in-laws. I co-signed for my in-laws apartment because it's not that they didn't have credit, they didn't have proof of income. In this case, they are our nanny while my wife and I at work and we pay them. So therefore, we pay their rent =P.

[hamchan]

FYR debit cards do not impact your credit at all. Neither do rent or utilities unless those are sent to collections.

[Starry436]

We've rented two places in the last few years and neither were interested in checking our credit. They were only interested in seeing proof of income. I'm sure it varies depending on the property and landlord.

[kv968]

When I rented my apartment (slightly higher end) I had just gotten divorced and my credit was wrecked (somewhere in the 500-600 range if I remember correctly). I sat down with the property manager and explained my situation to her. Granted, I had a good employment history and made enough money but my credit was practically ruined due to the divorce and some things that happened in the marriage.

I got the apartment but the manager said afterwards that had I not told her my situation which she conveyed to the "admission committee" but instead just relied on the numbers that I wouldn't have gotten the place.

[KTP]

What if you have good credit but are unemployed? Our credit rating is around 820 but we will need to rent an apartment for a few months during early retirement. I had not thought about places asking for employment.

[scfr]

What if you have good credit but are unemployed? Our credit rating is around 820 but we will need to rent an apartment for a few months during early retirement. I had not thought about places asking for employment.

Perhaps you could offer to pay upfront for the term of the lease?

[TheKayla]

What if you have good credit but are unemployed? Our credit rating is around 820 but we will need to rent an apartment for a few months during early retirement. I had not thought about places asking for employment.

If it's retirement, you should still having income coming in from SS or retirement accounts right? Or is there some reason you wouldnt? It's rather 'proof of income' than 'proof of employment', technically. So yes, if your income will exceed your rent/income requirements for the lease, you're covered. Or, like the above poster said, the vast majority of landlords will waive the proof of income if you pay for the lease entirely up front rather than in monthly installments. I worked for a leasing office that did that. There were a lot of college kids that lived there, and while you needed to make double the rent each month, some kids just paid up front for the whole year (usually with loan money, bad idea in itself, but same concept -- better to do it with savings!) and their income didnt matter. Some of those kids didn't even have jobs during the school year.