How to Get an Apartment With No Credit
1. Bring Reference Letters and Proof of Income
The first steo in renting an apartment with no credit is getting all your paperwork in order. If you have no credit, you'll want to compensate for it by showing you have enough money to afford the apartment. Gather your financial documents, such as tax returns, bank statements, W-2s, and proof of any other income or assets. It also helps to get a few reference letters from past landlords, managers, or colleagues to vouch for your character and sense of responsibility.
2. Offer to Pay a Larger Security Deposit
Another way you can convince the landlord to take a risk on you is to offer to pay a larger security deposit. The amount you should offer will depend on how much of a risk you pose to the landlord, but typically 1 or 2 months will suffice. The landlord is permitted to keep your security deposit if you don't pay, so offering more than one month is an excellent way to show you're good for the money.
3. Explain Your Situation to the Landlord
It's always possible that an honest conversation can convince the landlord that you're a trustworthy tenant. Perhaps you just graduated college and haven't had a chance to build credit, or maybe you're coming from a different country and need to familiarize yourself with the US financial system. If all you do is submit your paperwork showing you have no credit, there's a higher chance you'll get denied. But if you address the landlord directly and explain the situation, they may be more understanding.
4. Get a Cosigner
A cosigner is someone willing to be on the lease with you and pay the rent if you cannot. Your cosigner must provide the landlord with documents to prove they can afford to cover your rent in addition to their own financial obligations. For instance, in New York City, cosigners must make 80x the rent to qualify. Your cosigner will only be required to contribute to the rent if you cannot, so as long as you pay on time, they will never get involved. Finding a cosigner can go a long way toward convincing a landlord to rent to you.
5. Find a Roommate with Credit
Finding a roommate with good credit is another way to convince a landlord to overlook your own lack of credit. Taking on roommates diffuses your personal responsibility because the other person will also be risking their credit if you don't pay. Therefore, a landlord is more likely to accept your application if one or more roommates have a good credit score, as long as you can otherwise meet the financial requirements.
Tips for Getting an Apartment Without Credit
1. Rent from a Private Landlord
One of the best way to get an apartment with no credit is to rent from a private landlord. Most private landlords only own one property and are much easier to negotiate with than large corporate landlords. With a large company or institutional investor, they'll typically analyze your risk profile using an algorithm and reject your application if you don't meet their requirements. But with an individual owner, you can better explain your situation and appeal to their emotions.
2. Offer to Move Right Away
Another way to convince the landlord to rent to you is to appeal to their bottom line. Every day that their apartment sits vacant, they lose money. So, if you offer to move as soon as possible and they don't have many other applicants, chances are greater that they'll be willing to take the risk.
3. Prove Income or Savings Balance
Credit is an indicator of your ability to repay your debts on time. So, if you can prove that you have plenty of income and savings to cover the rent, credit may matter less. For instance, if you show you have six months to a year of rent in a savings account, the landlord may feel more comfortable accepting your application.
4. Pay a Few Months' Rent Upfront as A Security Deposit
The other alternative is to prepay a few months' rent. The landlord may not be satisfied by seeing the balance in your account in case you spend it and may want to hold it in escrow to be safe. You could offer to put it up as a security deposit; that way, if you pay on time, you'll get the money back at the end of the lease.
5. Provide Reference Letters
Reference letters can help you rent an apartment if you have no credit. Financial documents don't always tell your full story, especially if you've made mistakes in the past that you've since corrected. Reference letters can be a great way to provide context to your application and help the landlord get a better sense of who you truly are.
6. Offer to Start Out Month-to-Month
If the landlord doesn't feel comfortable with a year-long lease, you could start out on a month-to-month contract. Month-to-month leases can be terminated at any time, so if you stop paying, they don't have to wait as long to evict you. That way, you can prove your ability to pay the rent on time and enter into an extended contract once the landlord feels comfortable.
7. If all Else Fails, Get a Cosigner
A cosigner is a surefire way to get your application approved with no credit. As long as someone with the credit and income to pay on time is on the lease, most landlords will be willing to overlook your lack of credit. Finding someone willing to take that risk on your behalf may be challenging. But if all else fails, this is the best way to ensure you'll be approved.
Getting an Apartment with No Credit Bottom Line
Having no credit may make renting an apartment more complicated, but it certainly isn't impossible. But you must be prepared and willing to meet the landlord halfway. The best way to ensure approval is to be as upfront as possible and find out what it will take to be approved with no credit. If you're honest and use some of these tips, your chances of approval will be much higher.