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Andy Ogorzaly's Blog

By Andy Ogorzaly | Broker in Oak Park, IL

Credit score still matters - especially for rentals

Disclaimer: I am not a credit expert; I am just stating my observations. Seek a professional credit counselor for advice on how to improve your score. I can refer you to one if needed.

With a cut-throat rental market, landlords have the power to be picky.  So, those corny free credit commercials are right about knowing your score.  In Chicago, you usually have less than a month to decide on a place, so don't wait till your first application if you don't know your score.  It's not fair to your roommates, family, agent if you don't have a plan B if your credit gets you denied.  I have gotten people accepted with pretty bad scores before, but usually those people have disclosed to me ahead of time that their score was challenged.  

Just like applying for college, applications cost money and it can add up quickly.  Management companies usually have strict guidelines for credit unless you get a co-signer.  But private landlords can be flexible.  A lot depends on what is actually on your report.  A landlord may be more forgiving for those outrageous medical bills, but not for the late credit card payments.  As people we are more than a score, so you in turn need to show them that you are human and responsible.  I didn't have the best ACT score, but my activities, GPA, and personal statement got me into University of Illinois.  As a result, you may need to show things like landlord history, income, bank statements, and write a statement explaining your history just stating the facts.  

Landlords will be much more impressed if you prepare these documents beforehand because it shows you are responsible and are eager to rent that apartment.  And just because you provide all these things doesn't mean you are in the clear yet.  Some landlords may want an extra month security or a co-signer if you take the unit.  

Quick wrap-up for challenged credit:
  • Pull credit to see what may be bring your score down
    •  http://annualcreditreport.com - it's FREE 
  • Look for errors and report any right away to the credit company
  • Have a statement ready to submit with your app, stating the facts - no excuses
  • Have a co-signer on hand; they must have GOOD credit - over 700
  • Have extra money ready in case they ask for a larger security deposit

Comments

By Chad Gray,  Sat Jul 14 2012, 07:32
Today it's more important than ever to have a great credit score! Thanks for sharing your insights.
By Andy Ogorzaly,  Mon Jul 16 2012, 00:52
Yup. Renters are getting hit hard from all angles - application fees, multiple apps, tough credit standards, and high rents!

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