When applying for house rentals, an applicant’s credit score, along with several other factors, is used by landlords to assess whether they’re a reliable tenant. For that reason, keeping track of your credit score is essential for anyone looking to rent a home.
While there aren’t any strict rules around credit scores, most landlords do have certain expectations. It helps to know what kind of score to aim for, and what steps you can take to boost it if it’s on the lower side.
Credit Score Requirements for House Renters
Landlords often rely on credit scores to gauge whether a rental applicant is a low or high risk. A credit score reflects a person’s financial responsibility, based on their borrowing history—including missed or late payments.
Credit scores range from 300 to 850, with higher scores indicating stronger financial habits. While there’s no official minimum score required to rent a house, most landlords prefer applicants with a score of 670 or higher, which is generally considered “good.” Scores above 740 are less common, but may give applicants the strongest edge in competitive markets.
That doesn’t mean renters with lower scores are out of luck. It may just take more effort to find a landlord willing to take the risk.
Factors That Impact Credit Scores
Understanding how credit scores are calculated is a handy way for renters to keep on top of their own. When calculating credit scores, credit bureaus typically consider the following factors:
- Late or Missed Payments
- Public Records
- Available Credit
- Credit History and Diversity
Let’s take them one by one:
1. Late or Missed Payments
Late or missed payments are one of the most common reasons for a drop in credit score. This includes not only rent from previous properties but also loan repayments, credit card bills, utilities, and more.
Consistently paying bills late can cause a gradual decline in your credit score. On the other hand, defaulting on payments (such as for auto loans, insurance, rent, or phone bills) can lead to a more significant and immediate drop.
2. Public Records
Events like evictions, bankruptcy filings, or loan defaults become part of your public record and are factored into your credit score by credit bureaus. These issues typically lower your score and can stay on your record for seven years or longer in some cases. For landlords, these public records are often red flags, especially if an applicant tries to hide them during the rental process.
Keep in mind that their impact lessens over time, as more recent payment history carries greater weight.
3. Available Credit
Using less than 35% of your available credit typically leads to a higher credit score than maxing out your credit each month. A lower credit utilization ratio is more attractive to landlords because it indicates you can manage credit responsibly without stretching your finances too thin.
4. Credit History & Diversity
Having a longer credit history usually helps improve credit scores, as it demonstrates the applicant’s ability to manage credit responsibly over time.
Additionally, having a mix of different credit types (such as credit cards, an auto loan, and a positive rental history) can boost scores slightly more than having just one type of credit. This diversity shows lenders a well-rounded and reliable credit profile.
5 Tips for Improving a Low Credit Score
If your credit score is lower than you’d like, don’t worry — you’re not alone, and there are ways to improve it. While it takes time and effort, following these tips can help boost your score. Ideally, start working on your credit several months before applying to rent a new home to give yourself the best chance.
1. Adjust Credit Utilization
Credit utilization is the percentage of your available credit that you’re currently using. For example, if your total credit limit is $10,000 and your balance is $2,000, your utilization is 20%. Aim to keep your credit utilization below 35% — the lower, the better.
How to lower credit utilization:
- Pay down existing debt
- Request higher credit limits
Paying off debt is usually the best first step, especially before taking on new loans or moving to a pricier rental. If possible, paying off and even closing some accounts can quickly boost your credit score.
2. Improve Credit History & Diversity
Building a strong credit history takes time, which can be frustrating, especially for younger applicants. But if you have the flexibility, it’s worth waiting to establish a longer credit history and greater credit diversity before applying for a rental.
You can boost credit diversity by opening new types of credit, such as paying auto insurance in installments instead of a lump sum or getting a new credit card. Just be sure you can comfortably manage any new credit accounts and keep your credit utilization below 35%. For those looking to build credit with less risk, credit builder loans are a smart alternative, helping avoid the temptation to overspend that credit cards sometimes bring.
3. Avoid Opening New Accounts Before Applying
Although diversifying your credit can help improve your score over time, it’s best to avoid opening new accounts in the months leading up to a rental application. New accounts reduce the average age of your credit and may trigger hard inquiries, both of which can temporarily lower your credit score.
4. Ensure All Bills Are Paid on Time
Payment history is the most important factor in building a strong credit score. Missed or late payments can significantly damage your credit, so staying on top of due dates is crucial. For those who tend to forget, automating payments is a simple and effective way to make sure bills are paid on time and in full. Today, many apps and online tools make managing payments easier than ever.
5. Check for Errors
Credit reports aren’t always perfect: up to 80% contain errors, and about 1 in 20 have mistakes that seriously hurt scores. Errors can happen due to mistaken identity, number mix-ups, and other issues. The good news? These errors are usually easy to fix, and correcting them can quickly boost your score.
Try these tips to ensure your credit report accurately reflects your financial history and gives you a clearer picture before submitting applications:
- Request a free copy of your credit report before applying to rent.
- Review it carefully for mistakes.
- Dispute any errors promptly to have them corrected.
How To Find a Rental With a Low Credit Score?
Improving a low credit score can take time. For newcomers to the country, younger renters, or anyone short on time, waiting to boost their score before renting isn’t always an option. Fortunately, there are ways to increase your chances of securing a rental—even with a low credit score. Here are some helpful tips:
1. Offer To Pay a Higher Security Deposit
A larger security deposit can reassure landlords who might be hesitant about renting to someone with a low credit score. It reduces their financial risk if the lease isn’t paid. Alternatively, offering to pay several months’ rent upfront can have a similar effect.
2. Find a Co-Signer
Having a guarantor or co-signer—such as a family member, friend, or employer—who agrees to cover rent if you can’t provides landlords with added security. New immigrants without local connections can often use third-party guarantor services.
3. Provide Proof of Income
Showing steady income that’s at least three to four times the rent helps convince landlords you can afford the payments. Longer employment history at the same job strengthens your case.
4. Consider a Roommate
When applying with a roommate or partner, landlords usually focus on the higher credit score of the two. If you don’t have a partner, finding a roommate can improve your rental prospects.
5. Provide Landlord References
Positive references from previous landlords can offset a low credit score. Make sure these are genuine, as landlords often verify them.
Keeping track of your credit score can make a big difference when you’re looking to rent a home. Ultimately, understanding what impacts your score and working to improve it can help you stand out to landlords. And if your score isn’t where you want it to be yet, don’t stress — there are still practical ways to find a place that works for you.
This article is for informational purposes only and does not provide legal or financial advice. Credit requirements, rental policies, and tenant rights can vary by location and situation. Before making decisions related to rental applications, credit issues, or lease agreements, it’s recommended that renters consult with a licensed attorney, local housing authority, or a qualified tenant advocate familiar with the rules in their area.
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