How Credit History Affects Your Ability to Rent an Apartment

Your credit history (good, bad, or the lack thereof) can impact your life in many ways. And if you want to rent a new apartment, the details on your credit report could help determine whether a landlord approves or denies your application.

Positive credit history may make it easier for you to lease an apartment, and it might save you money on your security deposit too. But negative credit history or no credit history at all could be a problem.

The guide below will help you understand how your credit history affects your ability to rent an apartment. Discover why landlords commonly rely on credit reports and sometimes credit scores to screen potential applicants. You’ll also find helpful steps you can take to try to put yourself in a better position before you apply for your next lease.

How your credit report impacts your ability to rent an apartment

When you apply to lease a new apartment, the landlord will likely check your credit as part of its tenant screening process. By reviewing your past credit history, a landlord can gain insight into how you have managed past credit obligations. This information can help landlords and property managers control risk when deciding whether to approve or deny prospective tenants.

If you have a track record of on-time payments to creditors, these details could work in your favor. But a history of delinquencies (especially serious defaults, evictions, foreclosures, repossession, or bankruptcies might make qualifying for a new apartment more difficult or more expensive.^[1]

What’s the minimum credit score to rent an apartment?

Often it’s the information on your credit report that matters most to a potential landlord, not your credit score. And because each landlord sets its own approval criteria for new tenants, there’s no such thing as a universal minimum credit score to rent an apartment.^[2]

Nonetheless, a good credit score might make qualifying for a new apartment easier. On a scale of 300 to 850, a FICO Score of 670-739 is a good credit score. Scores of 740-799 are classified as very good and FICO Scores of 800 or higher are considered exceptional.^[3]

You don’t necessarily need a 670 FICO Score to be eligible to rent an apartment. However, if your credit score falls below the mid-600 level, a landlord may want to perform a more detailed review of your credit information when you apply for a new place to live.^[1]

Other details that may affect your ability to rent an apartment

Aside from your credit information, below are other important factors that landlords may consider during the tenant screening process.

• Income: A landlord will want to know that you can afford the apartment you’re interested in leasing. Criteria can vary, but it’s typically a good idea for your income to be at least three times the cost of the monthly rent on the apartment you’re seeking.^[4]
• Past evictions: Judgments from past evictions no longer appear on traditional credit reports. Yet landlords can purchase separate eviction reports, if desired, to see if prospective tenants have a history of previous evictions. If you have been evicted from an apartment or rental home in the past seven years, those details may appear on a tenant screening report and could make it difficult to rent a new place to live.^{[5] [6]}
• Criminal background: It’s also common for landlords to perform a criminal history check on potential renters. You can find more information about what to expect from apartment-related background checks on the FTC website.

You’ll provide income information and other details on your rental application. However, past evictions, criminal background searches, and other data will likely show up alongside your credit details on a tenant screening report.

In many states, you may have to pay for the cost of your own tenant screening checks out of your own pocket. These reports typically cost around $40 or less and are usually provided through one of the three major credit bureaus—Equifax, TransUnion, or Experian.^[7]

Can you get an apartment with no credit history?

When you have no credit history, leasing an apartment could be a challenge depending on the property management company and its guidelines. Yet there are potential ways to rent an apartment with no credit history.

Providing a cosigner or a roommate with good credit are two options that could boost your chances of approval. Likewise, if you can provide proof of financial stability along with a larger security deposit, your odds of qualifying for a new apartment may improve as well.

If you’re not in a rush, it may be in your best interest to work on building your credit before trying to rent an apartment in your own name. Strategies like credit builder loans, secured credit cards, and perhaps even authorized user accounts may help you establish positive credit if you manage the accounts responsibly over time.

Can you get an apartment with bad credit?

Renting an apartment with bad credit could be even more difficult than qualifying for a new lease without credit history. When you have no credit, a landlord is in the dark regarding your credit risk. With bad credit, the landlord has evidence that you’ve struggled to manage past credit obligations. And it may be concerned that you won’t make future rent payments on time.

Nonetheless, there are ways to improve your odds of qualifying for an apartment with bad credit. Again, a co-signer or roommate with good credit might be helpful, as could letters of reference from past landlords or others. You might also consider searching for no-credit-check apartments or applying with a private landlord who has less stringent approval requirements. Finally, offering a larger security deposit may also work in your favor.

Of course, working to rebuild your credit after past mistakes could be a good idea for numerous reasons as well. Bad credit can not only make it harder for you to lease an apartment, it could also make it difficult to qualify for loans, credit cards, and other types of financing. So while it may take time to bounce back from bad credit, the effort could be well worth it in the long run.

Does an apartment lease show up on your credit report?

After you sign a new lease, you may wonder if paying rent builds credit. Yet unlike many of the other types of bills you pay (e.g., credit cards, loans, etc.), most apartment leases don’t show up on your credit reports with Equifax, TransUnion, and Experian unless you take some type of action on your end first.

To have an apartment lease and rent payments appear in your credit history you must typically take one of the following steps.

• Use a third-party rent reporting service
• Ask your landlord to use a third-party rent reporting service

Often rent reporting services involve a fee of some type. If you sign up for the service directly, you will need to pay the fee directly. Otherwise, your landlord may pass along the fee to you (perhaps as part of your rent or as a separate, additional fee).

How to build credit with rent payments

If your landlord doesn’t already use a rent reporting service, you can choose one that seems like a good fit for you. Keep in mind that some third-party rent reporting companies may not report to all of the major credit bureaus. So, it’s important to make sure that a company will report to Equifax, TransUnion, and Experian before you sign up for its rent-reporting services.

Some services may also offer additional benefits. Self, for example, offers customers free rent reporting to all three credit bureaus. For a one-time fee of $49.95, you also have the option having Self report up to two years of past rental payments to the three major credit bureaus.^[8]

Once you enroll in a rent reporting service, remember that on-time payments are essential. Payment history has a bigger influence on your credit score than any other credit scoring factor. If you add rent payments to your credit reports and you pay your rent late, those late payments could damage your credit score rather than help it.^[9] Self only reports positive rent payments to help consumers build payment history, which has the greatest impact on a credit score.^[8]

Next steps

Before you apply for a new apartment, it’s wise to check your three credit reports. Good credit history could put you in a better position to qualify for your next lease. It might also help you save money in the form of a smaller security deposit. So, it’s worth paying attention to the condition of your credit history and working to make sure it’s in the best shape possible.

Sources

1. myFICO.com. “What Do Landlords Look for in a Credit Check?” https://www.myfico.com/credit-education/blog/credit-score-to-rent-apartment
2. Experian.com. “Can My Credit Score Affect Renting?” https://www.experian.com/blogs/ask-experian/can-my-credit-score-affect-renting/
3. myFICO.com. “What Is a Credit Score?” https://www.myfico.com/credit-education/credit-scores
4. MySmartMove.com. “What Do Rental Background Checks Consist Of (Factors to Watch).” https://www.mysmartmove.com/blog/what-rental-background-checks-consist-of
5. Experian.com. “Judgments No Longer Appear on a Credit Report.” https://www.experian.com/blogs/ask-experian/judgments-no-longer-included-on-credit-report/
6. MySmartMove.com. “Tenant Eviction Checks.” https://www.mysmartmove.com/tenant-screening-services/eviction-check#accordiongroup-2a49069777-item-11496499d2
7. Nolo.com. “How Landlords Can Check a Tenant’s Credit Report.” https://www.nolo.com/legal-encyclopedia/how-landlords-can-check-tenant-s-credit-report.html
8. Globenewswire.com. “Self Financial Announces Free Rent Reporting to Expand Credit Access.” https://www.globenewswire.com/news-release/2023/12/05/2790982/0/en/Self-Financial-Announces-Free-Rent-Reporting-to-Expand-Credit-Access.html
9. myFICO.com. “What Is Payment History?” https://www.myfico.com/credit-education/credit-scores/payment-history
10. Consumerfinance.gov. “A Summary of Your Rights Under the Fair Credit Reporting Act.” https://files.consumerfinance.gov/f/documents/bcfp_consumer-rights-summary_2018-09.pdf

About the author

Michelle Lambright Black is a nationally recognized credit expert with two decades of experience. She is the founder of CreditWriter.com, an online credit education resource and community that helps busy moms learn how to build good credit and a strong financial plan that they can leverage to their advantage. Michelle's work has been published thousands of times by FICO, Experian, Forbes, Bankrate, MarketWatch, Parents, U.S. News & World Report, and many other outlets. You can connect with Michelle on Twitter (@MichelleLBlack) and Instagram (@CreditWriter).

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