Are you moving to the U.S.? Are you struggling to rent a home, given that you have no credit score or references?
Don’t worry. You’re not alone.
According to the U.S. Census Bureau Mobility Study, between the years 2005 and 2010, about 3.7% of renters in the U.S. relocated from abroad.
Sohrab (who doesn’t want to be further identified) is one of these renters. He moved to the U.S. from Pakistan without any credit or rental history. Like many others in his shoes, he learned firsthand that renting in the U.S. can be difficult if you don’t have any credit history or references.
Fortunately, he found a solution. (More on that below.)
If you’re relocating to the U.S., the following seven tips can make your move a little easier:
1. Gather basic documents
First things first. These are the basic documents you’ll need for pretty much any rental application:
- A copy of your passport and/or photo ID
- Visa and/or naturalization papers
- Social Security number or tax ID number — this is not formally required, but many landlords will ask for it, and not having one could count against you. Bear in mind, it takes at least a month to obtain one, so apply before you move to the U.S., if you can.
- Driver’s license or international driving permit (if you have one)
- Recent bank statements
- References (see below)
- Credit history (see below)
- Proof of employment (see below)
- Bonus #1: It’s also nice to have a short letter of introduction explaining who you are and why you’re relocating. Make sure to throw in a personalized line or two for each application explaining why you’d like the property.
- Bonus #2: Most rental applications ask for the same information over and over again. Save yourself some time by creating a master document with all the necessary information. Bring a copy to each rental showing. If the landlord requires extra information, you can write it in, but this saves everyone time — and gets you points for being well-prepared.
When Sohrab was looking for a place to live, he emphasized the documents he could provide rather than the ones he couldn’t. He was upfront about his lack of credit history, but he presented proof of employment to his future landlord. He had a stable job with an employer that was willing to sponsor an H-1B visa (work visa) on his behalf, and he emphasized that point.
2. Know your references
Landlords need to know that they’re renting to someone who is trustworthy and responsible. Offer references who can vouch for your character and reliability.
Some great ways to obtain recommendations include:
- Get a letter of reference from your current landlord (in your home country).
- Ask for letters of recommendation from current and past employers.
- Request a reference from a professor or teacher if you’re a recent graduate.
Make sure everyone who vouches for you provides their email addresses, as not all landlords will want to make a long-distance call — or deal with time zone differences — to contact your references.
3. Establish credit and financials
Establishing credit when you don’t have a credit history is a catch-22 — it’s hard to get credit when you have no history, but it’s hard to build a history when no one will give you credit. How do you get around this?
You might want to consider opening a department store credit card. The interest rates are usually high, but a store credit card is much easier to obtain than a standard credit card and can help you establish a good credit history. You can avoid paying high interest rates by paying the balance in full each month. And you’ll build good credit if you regularly pay on time. (Just make sure the card reports to the credit bureaus — not all do.)
Alternately, you can apply for a secured credit card from a bank or credit union. This is obtained by offering an asset, such as a car or a cash deposit, as “backup” for your line of credit. Any asset you offer can be seized if you don’t live up to the payment terms, so don’t charge too much to your card.
Often, these cards will have low limits — Sohrab’s one and only credit card has a mere $500 limit. But it’s a steppingstone that helps him build credit.
Opening a credit card will help you build credit over the long term. But how can you rent an apartment right now?
Landlords check your credit history to determine whether you’re a risk or a safe bet. So you’ll have to find other ways to demonstrate to them that you’re not a risk. Here are three great tactics:
- Provide recent bank statements that show your savings.
- Provide a letter from your last employer that indicates how long you were at your previous job. (Several years at a former job shows stability.)
- Supply a letter from your new employer that proves you’ll have stable future income.
Speaking of which …
4. Show proof of employment
If you’re moving for a new job, show your potential landlords a copy of your signed job offer letter. The letter should indicate your job’s start date and state how much money you’ll be earning. This is precisely what Sohrab emphasized to qualify for his first rental.
If you’re relocating to a new branch of your current company, have your employer give you a signed statement confirming your continued employment.
5. Offer double the security deposit or three months’ rent
Since you’re an unproven tenant, offer to provide the landlord with double the required security deposit, or pay two or three months’ rent in advance.
This helps ease some of the landlord’s doubts. After all, if you’re offering a heftier security deposit and/or advanced payment, then the landlord won’t carry as much of a risk.
6. Protect yourself from scammers
When you’re searching for an apartment, you’ll find a mix of corporate-owned apartments and mom-and-pop landlords.
Often, these mom-and-pop landlords might be more accommodating. They’re not bound by a corporate policy. They have the flexibility to use their own intuition and judgment when they’re making a decision.
But beware of scammers. Sometimes, people pretend to be landlords, accept your security deposit, and then disappear.
Don’t wire money from overseas. Don’t pay for an apartment unless you’ve toured the space in person. Don’t hand over a deposit until you’ve signed the lease and obtained a key. And never pay your deposit in cash — always write a check.
7. Look for short-term housing
If you can’t find an apartment at first, consider temporary housing, such as an extended-stay hotel or a vacation rental. Short-term rentals are pricier, but their application criteria aren’t as strict. (They usually don’t require a credit check or references.)
Rent an apartment for one or two months, and during that time, work on obtaining a Social Security number, building a credit history, and finding or demonstrating your employment. As a bonus, the hotel manager and/or vacation-rental owner can serve as your first reference.