Your credit score is like your financial report card. It’s a measure of creditworthiness, and places such as banks or lenders associate this number with your level of financial responsibility. Just as a D in high school geometry had severe consequences on your TV time, a bad credit score can really come back to bite you.
Lenders won’t give you low interest rates, banks may turn you down for loans, and worst of all for renters, landlords may not allow you to rent. That all sounds pretty dire, but here’s the good news: You can get proactive about improving your credit score.
Paying off debt, keeping low balances on your cards, and establishing a history of paying your bills on time and in full will contribute to a better score.
But that all takes time, and you may need to sign a lease on that apartment for rent in Boston, MA, before your credit score has improved. Fear not: If you have terrible credit that you’re working to correct, you can still land a great apartment — you just need to try a few of these strategies.
Prepare a letter of explanation
If your financial situation looks bad on paper because of a terrible credit score, but in reality your finances are in good shape, you may be able to write a letter of explanation to the landlord. This document is just what it seems: a letter that explains why there’s a discrepancy between your credit score and the current health of your finances.
Provide as much detail as possible and include documentation for any claims that you make. In addition, plan to get letters from a past landlord or a current employer. Past landlords can vouch for you, attesting to the fact that you paid your rent on time and in full. Employers can verify your employment status and your income.
You can also ask for recommendations from others who understand your financial situation (such as a financial adviser) to further show you’re more financially responsible and capable than your credit score may suggest.
Prepare to offer more cash upfront (and other incentives)
Landlords may deny you if you apply with a poor credit score. Looking at it from their perspective, this harsh move makes sense: They’re simply trying to protect their own financial interests.
While it’s hard to judge someone by a single metric, credit scores can provide insight into whether you’ll be able to afford your rent — or how likely you are to pay each month. Considering this, putting down a larger cash deposit can help ease a landlord’s fears.
Besides cash, there are other ways to negotiate renting with bad credit: You can offer to move in immediately so a landlord doesn’t have to deal with vacancies. Or you can ask to sign a shorter lease, so their perceived time of risk is shorter.
Set up automatic payments
In addition to putting down a larger cash deposit, you can provide a landlord with peace of mind by offering to set up automatic rent payments each month. This way, there are no concerns about human error (such as forgetting to mail a paper check), and the landlord knows the rent payment will be made in full and on time, every month.
Terrible credit can hinder your ability to get the apartment you want — but it doesn’t have to be the final word on your search for a great apartment. By being proactive, you can ease a potential landlord’s concerns about your financial situation and show that you’re prepared to handle the rent payments and secure your ideal home. And best of all, paying monthly rent can actually build your credit history and help raise that less-than-ideal score.