Bad credit? Here is how to rent with bad credit.

Credit scores are seen as a numerical probability that you will pay your debt and if you will meet your obligations. A poor score indicates that you are more likely to default. Many landlords now rely on a credit check to vet potential renters, especially in competitive markets.

Like it or not, your credit score, credit history and references will be used to assess how much of a financial and damage risk you may pose. Are you going pay your monthly rent on time, will you look after the property? Or does your credit report indicate that you have a history of paying bills late?

There is hope for renters with bad credit (or no credit at all, if you’re a new college graduate, for example).

Here’s how to rent with bad credit:

  1. Find a guarantor or co-signer:Ask a parent, trusted friend, or relative with good credit to co-sign the rental application with you. Know that this puts them at risk if you don’t meet your obligations.
  1. Be honest and show progress. Sometimes poor credit scores are not a reflection of bad money management. You may have lost your job, suffered from medical problems, or experienced another financial setback that was out of your control. Explain what happened, how you have recovered and what you are doing to improve your credit scores and history. A proven track record shows a prospective property manager that you’re responsible and committed.
  2. Pay rent in advance or increase your security deposit. Bad credit indicates that since you defaulted on past bills and that you might default on the rent. Paying a month or more in advance or offering a two-month security deposit, shows commitment, and provides extra cash that can cover some of the losses and damages when you leave.
  3. Get a roommate to share your living areas and to share the bills. By reducing your financial burden, you can continue to pay down debt and repair your bad credit faster.
  4. Show solid income and offer to pay via direct deposit.  A history of regular, consistent income, helps to show that you are able to pay rent on time.  When applying for an apartment, your can show your income with recent pay stubs, tax returns, and even a letter from your employer confirming your employment status and income. Offering to have your rent automatically deducted from your bank account can also help.
  5. Compromise by paying a little more. You may be able to negotiate a slightly higher rent as a gesture of good faith.
  6. Provide written references and recommendations. Letters of reference and recommendations from current and previous employers, landlords, and even past roommates who can vouch for your character.