When first-time renter Angelica Fattu-Logan, 20, started applying for apartments, she braced for rejection. But those rejections never came — in part because she had good credit.
“I applied to about three or four different apartments, and they all accepted me right away,” says Fattu-Logan, a drugstore manager and college student from Peoria, Ariz., who recently moved into an apartment with her fiancée.
For young folks fearing rejection from landlords, Fattu-Logan’s positive experience is heartening. It also illustrates an important point: Good credit can be especially helpful for first-time renters.
When you are new to renting, good credit can make up for other shortcomings in an application.
“If [applicants] have a good credit score, even if they haven’t rented before, that means that they’ve handled their finances well and that they’re responsible,” said Laura Agadoni, a landlord and real estate writer based in Marietta, Ga. That could be enough to make up for a lack of a rental history, otherwise a major factor in rental decisions, she says.
Requirements can vary, but Agadoni said many landlords look for credit scores of 640 or higher for renters. They also consider factors such as income, debt and employment.
In some cases, those with good credit scores might not need to find a co-signer, a person — often a parent — who’s equally responsible for making payments.
If you are approved with good credit and meet all the landlord’s requirements, you will generally just have to pay the security deposit and rent described in the rental listing. But if you are approved with bad credit, you may have to pay a premium — not just on rent, but potentially for utilities, too.
Many utility companies — such as electricity and gas providers — also charge upfront deposits to those with poor credit.
In cities where the rental market is extremely competitive — say, San Francisco or New York — having good credit is just table stakes. But in areas where landlords have trouble finding tenants, a good score can give you bargaining power.
That’s because good credit is a crystal ball that tells landlords you are reliable. “How you pay your bills is predictive of how you are going to pay your bills in the future,” said credit expert John Ulzheimer. “That includes rent.”
If a landlord is eager to find a renter and you have good credit, “the apartment [landlord] is absolutely going to want you to move in, and move in lickety-split, because they are going to want to start getting paid,” Ulzheimer says. “And you can lean on them a little bit.”
Before you go apartment-hunting, check your credit reports and credit scores to see where you stand.
Doing so is free and doesn’t hurt your scores. If you have good credit, you can walk into property viewings with confidence, knowing you are set up for success. If you have bad or no credit, you can focus on making improvements. Be upfront with landlords about what steps you are taking to work on your credit and, in the meantime, budget for a larger security deposit. It may take longer to find a space that’s right for you, but with persistence — and maybe some help from a co-signer — you will get there.
Claire Tsosie is a writer at NerdWallet. E-mail: firstname.lastname@example.org. Twitter: @ideclaire7.