Will a Landlord Deny Me Because of My Credit

The majority of renters know that landlords/owners like to approve tenants with strong credit scores, and quality references. Bad credit has unwanted implications; like higher interest rates on loans, and when it comes to renting homes or apartments, denials.

Today, the majority of management companies and landlords will use a screening service. This will allow them to check the detailed history of a particular tenant. There are many instances that will automatically disqualify you.

Initial Screening Process

Landlords will run a full background check that includes any criminal history, as well as a full credit check. They will be able to see late payments, charge-offs, and any negative issues that are part of your full credit profile.

They may even ask for references from previous landlords. Sometimes they will request a professional reference. You can expect a full interview as well with landlords overseeing smaller projects. The larger apartment communities conduct something much simpler. They can approve or deny you in less than a day. References are generally not needed.

Reasons for Rejection

Some of the most common reasons for rejection include evictions for non payment, foreclosures, and low credit scores.

Many landlords are now using this "Credit Score" in their overall process. If you are a renter or potential buyer for that matter, you can certainly request the approval guidelines before you apply. Bill Gassett suggests checking out your credit profile on Credit Karma. Lenders and creditors are always looking at scores in their overall evaluations. Anybody for that matter can check their profile for credit issues.

This can give you a head start on rectifying any issues you were unaware of.

Pro Tip: Many times if you owe another landlord money, you can contact them directly and potentially negotiate a lower payment than what is owed. Then you can contact the credit bureaus with proof of payment, and have them remove the negative marks on your credit profile.

Find a Home with an Independent Owner

The main issue with larger communities overseen by large management companies is that they seldom change their mind based on personal circumstances.

Targeting a smaller operation is what is needed in these situations. This means finding an owner who wants to lease out a private residence or duplex. They may be more willing to listen to your story. You can explain to them why you will make a good tenant, plus provide your personal rental experiences.

Some professionals recommend that renters with poor credit also write a personal statement. This allows them to give their side of the story. Also if a renter has good rental history after the fact, this proof can certainly go a long way in the overall approval process.

Proof of Payment is Necessary

For most owners, the ability to make ontime monthly rental payments is by far the most important component. So if you are an applicant, bring your pay stubs. Self employed individuals can bring the last 6 months of their bank statements showing deposits.

The larger management companies that oversee property with hundreds of residences usually require incomes 3.5 times the monthly rent. It's not unusual to believe that individual landlords will expect anything different.

Push for a Larger Down Payment

This technique can certainly impact the decision. Volunteer making a larger down payment, or possibly advancing 2 or 3 month's worth of rent; can certainly go a long way. This will certainly convey that you are serious and have the financial means to rent their domicile

Find a Co-Signer

A co-signer is usually a family member or close friend who will co-sign the lease on your behalf. They will be held equally responsible for payment if you fail to make the required monthly rental payment.

The co-signer must have strong credit and a high income level.

So will a landlord deny your application because of your bad credit? In many cases they will. But all is not lost. It will take some work on your end, but securing a lease is certainly possible for those that have a lackluster credit score.