How To Rent A Home With Bad Credit

Landlords and apartment complexes are among the many businesses that use your credit to decide whether or not let you borrow money or services. Bad credit can cause you to end up homeless, if you're looking in the wrong places.

Different landlords have different credit requirements. Some might deny your rental application if you have blotchy credit, even if you have a spotless rental history and a sizable salary.

If you're worried that a bad credit history will keep you from finding a place to live, there are other options you can exercise.

Avoid A Credit Check

The key to getting an apartment when you have bad credit is finding a landlord that doesn't do credit checks. Start by looking on Craiglist, an online classified listing.

In the housing section of Craiglist, apartment owners advertise rentals (apartments, condos, townhouses, and houses) they have available.

The classified section of your local newspaper (or that of the area you're interested in moving to) is another place where property owners advertise for rentals. Sunday's paper usually has the most advertisements.

Many homeowners use real estate agents to rent their homes. Checking with real estate agents in your area might help you find an apartment, townhouse, condo, or house to rent.

As you inquire about an apartment, ask the landlord what criteria is used to approve tenants for the rental. If credit check isn't one of them, then you have one less thing to worry about. However, if there is a credit check involved, you have some additional options for getting approved.

Get Recommended

Getting someone to vouch for your financial responsibility can help dampen the effect of negative entries on your credit report. Contact people with whom you've have a financial relationship - previous landlords, your bank, current/previous employers.

If you have past due accounts on your credit report, pay them off and get the creditor or lender to write a letter stating the account has been paid in full.

Write your own letter explaining the situation that caused your financial problems to persuade the landlord to rent to you.

Be careful about the situations in which you use letters of recommendation. If a landlord isn't aware of your credit history he may become unnecessarily suspicious when you hand him a letter explaining your past financial problems.

Have A Co-Signer

Getting someone to co-sign your lease is another option. Your co-signer will need to meet the necessary credit qualifications.

Keep in mind that if you skip out on your rent or get evicted for any reason, the landlord can legally go after the co-signer for the value of the lease. Use other people's credit sparingly and be more careful with it than your own.

It Can Cost More

Whether you're able to get around the credit check altogether or you get approved for an apartment despite your credit history, expect to pay more money upfront. You'll might be required to pay a higher security deposit or several months of rent to move into your new apartment.

If you don't have the best credit and will be moving in the near future, start setting some money aside and begin looking for a new place as early as possible. The sooner you start looking, the more time you'll have to prepare.

Better Credit For The Future

A bad credit history doesn't mean you won't pay your rent on time. Unfortunately, your credit report and score might tell a different story. Even though you can work around some credit checks, you often end up paying more than you would have otherwise. That's why it's important to take steps to ensure your credit report matches your bill-paying habits.

As you have discovered a poor credit rating can affect your ability to rent property. It can also affect future employment, obtaining a security clearance and even your ability to obtain insurance.

Try to find an apartment directly from an owner of a small building, as opposed to going through a broker or management company. Small-time owners are more likely to be flexible. Check out the apartments listed by owners on Craigslist to start out.

If you're upfront with your future landlord, you have a good history of paying rent on time at your previous apartment, and you've got a co-signer on deck to co-sign if needed, you'll be fine. People with poor credit do get apartments; their landlords just need assurance that rent will be paid on time.

If this proves to be too difficult, only put the spouse's name to be on the lease if applicable that has the strongest credit score. As the spouse of the lessee, you would have all the same legal rights as he would. (If you weren't married, though, you would have a much more difficult time; roommates who aren't on the lease have few rights.

Finally don't discount your local real estate agent. Try to work with a small Mom and Pop real estate office as opposed to a larger office where you may not be handled with care. Most neighborhood agents that specialize in certain neighborhoods will know a lot of the landlords through past interactions. The real estate agent will more than likely be able to give you detailed info regarding the area and the surrounding businesses you would utilize while living in the area. This approach is very effective when the real estate market is slow and agents are eager to get any business and new clientele to stay afloat.

Apartment hunting is stressful enough, and if you're willing to pay a little extra, you can hire a broker to help you. Be mindful, though, that in some locations, brokers are the only ones with access to most of the available apartments, in which case, you have little choice in the matter and must save up enough to cover a broker's fee. There are some ways to avoid broker fees.

Whether you use a broker by choice, I will relay some advice on getting the most out of the experience.

1. Don't use only one broker. If you land a bad broker, it's harder to tell when you don't have someone to compare them to. Working with more brokers also means casting a wider net into the apartment market.

2. Stick with brokers you like.

If you find one that's honest and eager to help, don't let them go. Make sure you get there business card, so when you need to find an apartment again, you can call them up.

3. Be honest with brokers on what you're looking for. If they show you an apartment that's ghastly, let them know. Don't be afraid to hurt their feelings, because they won't take it personally. Also tell them what you specifically don't like, so they can look out for apartments that meet your standards. It'll save both of you a lot of time.

4. Keep in mind what you want out of the apartment. Brokers are salespeople. Some will romanticize the apartment or offer suggestions on how to use the space. It may be that they genuinely believe it, but don't get caught up in their excitement and start adjusting your lifestyle to fit the apartment. Only go for apartments that meet your needs and preferences.

5. You're paying the broker, not the landlord, so always remember that they work for you.

If you plan on using an apartment broker, make sure the broker remembers that you're the one who's paying for their services, not the landlord.

Apartment brokers have divided interests between serving the landlord, the tenant and themselves. The landlord wants a responsible tenant at a rent that's as high as possible without driving tenants away. You, the tenant, desire a decent apartment at a rent that is as low as possible. The broker works to get paid as soon as possible and as much as possible. Thus, the broker must find a tenant quickly, who's willing to pay for higher rent apartments. Add to that the fact that brokers work with landlords over a long period of time and only work with the tenant until the lease is signed. Maintaining a strong relationship with the landlord is important to brokers.

All of this means that if you're not assertive, brokers may focus their attention on other tenants, show you apartments that are just slightly higher than your maximum rent or pressure you into signing the lease by giving an apartment more credit than it deserves.

Consider using an apartment broker when looking for an apartment. For a fee, apartment brokers show you apartments that meet your price range in the neighborhoods in which you're interested.

Pros to working with an apartment broker

Access to more or different apartments. Each apartment broker has an inventory of apartments which they are given permission by the landlord to show. In some cities, brokers control the market, which means that most apartments are available only through brokers. Some landlords do work with multiple brokers, which can drive up the competition, if more than one broker is clamoring to rent out the apartment. This, of course, is more of an issue in areas dominated by apartment brokers.

View many apartments quickly. After telling them your price range, desired apartment size, and any other specific requests, they can show you those apartments that fit your specifications much quicker than if you scanned the classifieds and visited each one yourself.

Knowledge of the local market. A broker knows the range of rent pricing in her local market, the average square footage, the character of different neighborhoods, and nearby supermarkets or gas stations to the apartment.

If you're moving to a new city, hiring a broker to answer any of your questions may be safer and faster than researching yourself or selecting the first apartment you see.

More forthright on an apartment's flaws. You, not the landlord, pay the broker's commission for finding you an apartment. Because they get paid a one-time commission, no matter which apartment you choose, a broker is more likely to be honest about an apartment's flaws than a landlord or company.

You pay only if they deliver. Usually, brokers are not paid their fee until you sign a lease. This is beneficial should you find a broker you do not work well with or they are unable to find you a desirable apartment. Be wary, though, if you are asked to pay upfront. Research the background of the broker to see if he is legitimate and trustworthy.

Work with multiple brokers. Working with more than one broker gives you access to more apartments, and you may find some whom you work better with than others.

Cons to working with an apartment broker

You pay only if they deliver. From their point of view, the faster you sign the lease, the sooner they get paid. Be watchful for brokers who will say anything just to get you to sign the lease.

Broker fees. Whether exorbitant or affordable, broker fees are additional costs and can be quite expensive. Find out the average rate for your local area and remember to budget this into your starting capital.

Apartment brokers who work for the landlord

Though rare, some brokers receive their commission from the landlord or real estate company. This may arise, if a landlord or company wants to protect itself from undesirable tenants by hiring brokers whom they trust to find them appealing tenants. You gain the benefits of working with a broker, minus the fee, but their first priority is to serve the landlord or company.

There will come a time when you dislike parts of your apartment lease. Some leases contain penalties for late rent that seem harsh. Some mention nothing about repairs. Others require you to pay for heat, even though your unit has no thermostat. The apartment lease is meant to protect both the landlord and the tenant. So, before you sign the lease, negotiate new terms or clarify in writing current terms.

Like any other contract, an apartment lease is between unique tenants and landlords and covers a specific apartment. So it is perfectly okay to modify what is oftentimes a standardized lease--and frequently, landlords do so by tacking on riders. It is in the best interest of both the landlord and the tenants that the lease is tailored to the individual needs of both parties.

It's easy to believe the landlord has the upper hand, but he or she doesn't. Just because the landlord has something you want (the apartment) doesn't mean you should accept everything in the lease. After all, you also have something the landlord wants (money, the habits of a good tenant). This gives you bargaining power to negotiate parts of the lease.In fact, some landlords are prepared for tenants who might negotiate items such as lower rent, free heating, and consequences for breaking the lease. They already know how much they will change a lease and are open to hearing your points.

Of course, there are landlords who will refuse your request to negotiate. They believe the lease is already fair, and your request hurts them. They want to keep the status quo unless they gain from changing the terms you want to negotiate. The apartment is owned by a large corporation that sticks rigidly to protocol. Whatever the reason, the landlord, like you, is thinking of his or her needs only. Don't let this stubbornness intimidate you. Like the landlord, you should stand up for yourself. If the changes you want to negotiate are fair and reasonable, the landlord loses very little and could gain a lot by pleasing a good tenant who may potentially renew the lease. If the landlord still refuses after you've exhausted all your arguments, you've lost nothing by asking.

Lease Negotiation Tips:

1. Ask for a copy of the lease before the lease signing, so you have time to review it. If you're reading this tip right before the lease signing and have yet to see the lease, don't worry. Just read over the lease carefully at the signing. If you feel uncomfortable with the lease or want someone to review it, ask to reschedule the lease signing.

2. Negotiate only with the landlord or someone who has the authority to make decisions. The broker cannot make any decisions.

3. Choose one person to be the negotiator, if you're signing the lease with your roommate. You don't want multiple people chiming in with points that contradict each other.

4. Know basic information about the landlord and try to understand the landlord's position. Is your apartment owned by real estate management company with thousands of units or a family renting out a room or their second home? Will a $25 reduction in rent be a big deal to them? Knowing the landlord's concerns will help you tailor your arguments in the lease negotiation.

5. The best negotiation time is during the signing of the lease when the landlord has approved you for the apartment and is ready to close the deal. You only have negotiation power when you have something the landlord wants.

6. Ask questions before you begin the lease negotiation. It's good to demonstrate your reliability as a good tenant. This is the one thing you can offer the landlord that will make him or her more open to negotiation. Asking questions is one way to show the landlord that you want to follow the rules.

7. Begin the lease negotiation after you've read the lease and asked all your questions. First identify what you want to change and why. Maybe you want a lower rent because it's higher than all the other apartments you've looked at and you see no reason for the higher rent. Or the ceiling is leaking and you want a guarantee that it will be fixed within a week, because you've had bad experiences with neglectful landlords.

8. If the landlord resists putting any changes in writing or seems offended or hurt by your negotiation, be ready to reassure him or her that you trust him, but you are a person who likes to play it safe.

9. If the landlord argues with you or puts you on the defensive, acknowledge the landlord's points by explaining why these concerns don't apply to you and remind him or her of your qualifications (good credit, timely rent payments, no disturbances, no damage).

10. Always ask twice, followed by the reason. Giving more than one argument during the lease negotiation lends further support to your request.

11. Write down all agreements on a piece of paper that is signed by all the tenants and the landlord. If it's a change to the lease, correct it on the actual lease, or write a lease rider that specifies it is overriding the lease. If any of the agreements are promised actions--such as repairs--write down a deadline (the water pressure must be fixed by this date).

12. Know what your expectations are beforehand. Will you sign the lease if the landlord refuses? How flexible will you be if the landlord agrees to part of your suggestions?

13. Be polite. Don't get angry or hostile, even if the landlord does. Take the higher ground and the landlord may respect your professionalism and believe you to be a good tenant.

14. Do not make ultimatums--change this or I won't sign the lease--unless, of course, you mean it. If you don't mean it, this will only backfire and prove to the landlord that you're being manipulative, and therefore untrustworthy.

15. Only negotiate items that are most important to you. Decide which issues are too small to argue over. The landlord is unlikely to concede to every issue, so pick your battles.

16. Write down all agreements on a piece of paper that is signed by all the tenants and the landlord. If it's a change to the lease, correct it on the actual lease, or write a lease rider that specifies it is overriding the lease. If any of the agreements are promised actions--such as repairs--write down a deadline (the water pressure must be fixed by this date).

17. Know what your expectations are beforehand. Will you sign the lease if the landlord refuses? How flexible will you be if the landlord agrees to part of your suggestions?

18. Be polite. Don't get angry or hostile, even if the landlord does. Take the higher ground and the landlord may respect your professionalism and believe you to be a good tenant.

19. Do not make ultimatums--change this or I won't sign the lease--unless, of course, you mean it. If you don't mean it, this will only backfire and prove to the landlord that you're being manipulative, and therefore untrustworthy.

20. Only negotiate items that are most important to you. Decide which issues are too small to argue over. The landlord is unlikely to concede to every issue, so pick your battles.

As mentioned earlier having bad credit will not prevent you from getting an apartment or home to rent but it wil make it more challenging. When you are ready financially with at least 2 months security deposit and the 1st month's rent work the phones and meet with the property managers personally.

Ensure that you have all of your documentation that will be needed with you to process your application. Most likely most landlords will request the following documentation when considering you as a tenant:

1. Driver's License
2. Social Security Card
3. 2-3 Recent Paystubs
4. Utility Bill in Your Name

Ensure that color copy is made of the driver's license black and white copies are very hard to read and the photo does not copy very well. Providing copies of your paystubs will further assist the landlord in considering you as tenant at his/her property. If you have an electric or gas utility in your name that does not have a past balance this also demonstrates you being a responsible tenant.

I can't stress the importance of role playing with someone so that you can build your confidence prior to speaking with the property manager to state your case. It is important that you overcome all objections with any positive information in regards to your ability to pay your bills for the accounts that are current.

Use the accounts that are in good standing to your advantage. If you have never been late on your rent with your past landlord emphasis that when you have your meeting with the property manager. If you can get your current or past landlord to write a letter on your behalf stating that you were a good tenant and paid your rent on time this documentation would help tremendously. Try to get the landlord to provide you with this letter prior to meeting with the landlord.

If you are set on a particular apartment refer to the apartment as if you already have been approved. To see where the landlord is in his considering you for the apartment if the conversation is going well. Ask when he think you could move in. Ask him what are some of the rules you should be aware of in regards to being a tenant in his/her building.

If necessary stress the fact (if this applies to you) that you have been late on paying bills but have never been late paying your rent. This fact should stick with the landlord that you have your priorities straight in regards to who should be paid first. Only stress this point if you haven't been late on your rent with your current or past landlords.