By AJ Smith, Credit.com
We've all heard about the importance of your credit scores when it comes to buying a home. But credit is important for renting as well. Some landlords won't rent to people with low credit scores. This doesn't mean you can't rent a home or apartment, though. There are some ways to get around this and prove to a potential landlord that you can afford the home and will make payments on time.
1. Find a Co-Signer
You may have bad credit, but if you have a friend or family with good credit, ask them to help you out. (But know they would be doing you a huge favor; adding someone's name to your lease is a big benefit for you and carries significant risk for them.) A co-signer is someone who signs the lease with you, taking on the legal responsibility to ensure the rent gets paid. A co-signer with good credit should ease your potential landlord's concerns.
2. Offer a Larger Deposit
If you want to show your landlord that you won't skip out on payments, you can offer a higher deposit. Often landlords require first and last month's rent when you move in. If you can save up more and give them a few month's rent upfront, they may overlook your poor credit scores. Be careful, though, because while this offers the landlord more security, it offers you less.
3. Have a Personal Referral
If your credit is bad but you have a good rental history, ask a former landlord to vouch for you. Hearing from a previous landlord that you have paid your rent on time in the past can carry a lot of weight with a potential landlord. He or she may be willing to overlook that low credit score and accept your application.
4. Talk About It
Don't avoid the elephant in the room. Address your bad credit frankly and honestly. You can explain why your scores are low and why that doesn't accurately reflect your ability to routinely pay your rent. Landlords are aware of the difficult economy of the past few years and may appreciate your honesty.
5. Find a No-Credit-Check Rental
Not all rentals require a credit check. Look for smaller landlords who don't do a credit check as part of the application process. It may require some more legwork, but it can be worth it.
6. Improve Your Credit
Even if you do find a rental with bad credit, immediately begin working to improve your credit for next time. Make your payments on time. Reduce your debt. Monitor your credit reports, which you can get for free from each of the major credit bureaus once a year, and your credit scores. (You can use a free tool like Credit.com's Credit Report Card, which updates two of your credit scores every month.) Make yourself a more attractive rental candidate so you don't have to worry about it when you move.
This article originally appeared on Credit.com. AJ Smith is an award-winning journalist with more than a decade of experience in television, radio, newspapers, magazines and online content. She currently serves as the managing editor for SmartAsset. AJ has a passion for meeting new people, sharing stories and helping others. She has degrees from Princeton University and Mississippi State University. AJ and her husband also write and illustrate educational children's books.
The Internet has turned me into a hardcore comparison shopper, and apartments are no different. There are dozens of apartment rental sites listing dozens of properties in my hometown. It pays to check out several of these sites when you're looking for a new pad. I mentioned a few sites you should use (and a few you shouldn't) in The Best (and Worst) Apartment Rental Sites. But don't stop your search with your computer. I found my last apartment through a "For Rent" sign in the window. The place was $150 cheaper than anything else I found, and I never saw an online ad for it.
Location is everything in real estate. If you live in the most popular area, you're going to pay the highest rent. But if you move a couple of miles (or sometimes even a few blocks) away, you can get a serious discount. For example, renters in my city (New Orleans) pay about $1,250 a month to live in studio apartments on a trendy street. I live four blocks away and pay $750 a month for a one-bedroom. I don't get bragging rights, but I'm still within walking distance - and I'm saving $500 a month.
I start looking for a new apartment a month or two before I need one. If I find a place I like, I keep an eye on it. More often than not, private landlords lower their asking price if they don't find a tenant within a week or two.
You're locked into your rent as long as you're under a lease. If you sign a longer lease, you'll be locked into the lower rate if the cost of rent goes up. Two years ago, my friend signed a three-year lease on his apartment. Last year, the landlord raised the rent $200 across the complex. By locking himself into a set rate for three years, my friend has saved $2,400 so far.
I am not a haggler, but when it comes to my single biggest expense, I negotiate. It doesn't always work, but if you do your homework - and give the landlord a good reason - he may be willing to lower the rent. (Learn how to haggle here: The Simplest Way to Save on Everything.) Start by researching the average rent in the area. If the landlord is charging more than everyone else, print out a few ads to prove it. Then convince the landlord that he should want you as a tenant. I ask for referral letters from my previous landlords, make copies of my bank statements, and pull my credit report. By showing the landlord that I'm a good tenant - and I know that he's over-charging - I can negotiate a better rate.
I always compare the cost of the rent with the amenities or the utilities that are sometimes included. For example, I recently looked at two duplexes. One went for $775 a month but didn't include any utilities or a parking space. The other rented for $800 a month but included water, trash, Wi-Fi, and an off-street space. Obviously, $775 is cheaper than $800. But when you consider the average water and trash bill in my area is $50 a month, and the average Internet cost is $45 a month, I'd actually save $95 a month by going with the more expensive rental.
If you have a skill a landlord needs, you might get a discount on your rent. My landlord rents a unit to a tenant who also serves as our maintenance guy. In exchange for doing the odd job, he gets $350 a month off his rent. But you don't have to be handy with tools. Landlords occasionally need people to maintain their website, design rental ads, or manage their properties. If you've got free time, offer to trade your services for a discount.
A few of my neighbors have made a quick profit by renting out their place for the night to tourists. Granted, there are some serious downsides to the idea - like your place possibly getting trashed - but my neighbor made $300 in two nights. If you live in a popular city, you could stand to make a profit a few times a year. Just make sure you get your landlord's approval - and ask for a security deposit before you open the door to strangers. If you're a renter, also check out 6 Myths about Renter's Insurance - and How to Save and 9 Ways to Remodel Your Rental Without Breaking Your Lease.
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