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Good credit can open a lot of doors. One of the ways good credit can impact your life positively is by making it easy for you to find your next rental.
So what happens when you don’t have good credit but plenty of money to afford rent? Is it possible to convince a landlord to let you rent an available home or unit? Here’s what you need to know about renting with bad credit but high income.
How to Rent With Bad Credit but High Income
It is possible to rent when you have a high income but low credit. However, there are some extra steps that you’ll need to take in order to get your foot in the door.
1. Show Proof of Your High Salary to Make Up for Your Low Credit Score
Some landlords are going to be willing to overlook low credit when you have a high income. Why? Credit checks prove to landlords that you’re capable of paying your rent on time. Without good credit, they’d normally choose someone else who has a higher credit score.
However, when you have a higher income, you show that you’re more than capable of paying rent. This can serve to alleviate some of the concerns a landlord may have so they can consider you seriously.
If you’re self-employed, gather invoices and bank statements to prove that you have the income you claim. If you’re employed by a company, gather documentation like pay stubs. Proof of income is a part of the application process anyways.
Being upfront about your credit score and coming up with proof of income can help you nip the problem in the bud. Let your landlord know about your situation as soon as possible if you’re interested in renting their property.
2. Look for Landlords That Don’t Run a Credit Check
Not all landlords actually run credit checks.
Sometimes, those with a lower credit score don’t want to have to deal with the hassle of being rejected. Application fees can really add up over time, and some people need to move within a brief timeframe.
Take some time to look around in your area and see which landlords don’t run a credit check. It can be a bit more difficult to find them, but it will pay off if you’re worried about your credit score.
3. Get Positive References From Previous Landlords
Imagine that you own a building. Someone approaches you with poor credit but a decent salary that shows they can afford to rent. Are you automatically going to rent it out to them?
Of course not!
If you fall short in the credit department, you want to make sure the rest of your application shines. This way, you will stand out to landlords and they will seriously consider you.
Get positive references from your past landlords who will vouch for you. This may put you ahead of other applications where people have few references or landlords who aren’t so nice.
4. Pay a Bigger Security Deposit
Taking on someone with low credit can be a big risk for a landlord. They don’t want to have to deal with a tenant who won’t pay rent on time. Worse yet, they can end up going through the process of having to evict them.
You can quell this anxiety by paying a bigger security deposit. This gives landlords the peace of mind they need knowing that you’re willing to pay more upfront. If you have a high salary, setting aside this money ahead of time won’t be a big deal.
As long as you take care of the place and are a courteous renter, you’ll likely see that money back too!
5. Explain Your Reason for Bad Credit History
A bad credit score doesn’t always equal a bad tenant.
In fact, a poor credit score can happen for any number of reasons. Maybe you maxed out your credit cards earlier in life and it’s still impacting your score. Perhaps you defaulted on a loan but have already paid most of it back.
A bad credit history doesn’t necessarily make you unreliable. It also doesn’t impact your ability to pay rent on time. Explain your situation to your landlord and let them know what happened. Being upfront and honest can allow them to understand why your credit is so low.
Then, they might consider this if they decide to move forward with your application. Taking initiative and getting ahead of the issue can offer great results!
6. Find a Co-Tenant
Maybe you’re not in a situation where you can or want to get a home or apartment alone. In fact, there are plenty of high-earners who live in areas where rent and cost of living are significantly higher. You might instead wish to find someone you can live with to better afford your lifestyle.
In this case, you can actually work around poor credit by finding a co-tenant. If they have better credit and you both can easily pay rent, you may experience less difficulty. This can help you get into places you might not otherwise get into alone.
Just remember that finding a co-tenant can be a tricky process. Consider who you can actually live with and who you will get along with throughout the course of the lease. The last thing you want to do is break a lease early, which can also affect your credit.
7. Set Up an Automatic Rent Payment
Setting up an automatic rent payment lets a landlord know that you’re serious about paying rent on time. This way, they don’t feel as though you’re going to “accidentally” miss it month after month.
It’s important to tell them this ahead of time so they know that you’re serious. The point here is to let them know that you will be responsible and ensure the rent gets to them. The more you demonstrate to a landlord that you’re dependable, the better you’ll fare down the road.
Improve Your Credit
All of the suggestions offered above make it easier to rent with bad credit but high income.
However, you likely don’t want to have to do this forever. While you’re renting with bad credit now, focus on developing better credit over time. Here are a few tips to help you get started.
- Look for secured credit cards or credit builder loans that will help you build credit with ease. These credit products are very accessible and made for those with poor credit.
- Make it a priority to make on-time payments every time. Further delinquency will only hurt your credit score.
- Try not to use more than 10 percent of your available credit line. Lower credit utilization can help you boost your score faster.
- Find rent reporting services. These services can help establish rental tradelines that boost your score with each payment. Rent’s not usually reported, so this can be a major help.
- Pay off any existing debts as soon as possible. Debt not only impacts your credit score but your quality of life. It can be difficult to move forward when you have debt looming over you.
- Dispute any incorrect information in your credit report. Check it yearly and reach out to the relevant bureau. You don’t want to be faulted for mistakes that aren’t related to your activity.
Is renting with bad credit but high income possible? Absolutely! But it can require more work on your end to land a rental. Use the tips in the guide above to make the process simpler as you work towards a better credit score.
What’s the Lowest Credit Score a Landlord Will Accept?
This is a nuanced question that doesn’t have a precise answer.
The general consensus is that you should have a credit score of at least 620. This seems to be a solid number regardless of whether you’re renting an apartment or a home.
However, you still may be able to find something with a credit score that’s less than that. Maybe you’ll be able to find something with a score of 580.
In some cases, you can find landlords that won’t run credit checks at all. This can be a major relief for those who have very low credit scores. Take a look around your local area to see what the average scores are.
Then, prepare ahead for the rental process by using the advice in this article. If you can find a landlord that doesn’t conduct credit checks, that’s always an option available to you as well.
Can You Recover From a Bad Credit Score?
Some people may feel like they will never be able to move past their extremely low score. This is especially true for those who have overwhelming amounts of debt to tackle. But is a low score a never-ending issue you have to deal with?
In fact, it’s not. You can recover from a bad credit score by engaging in better credit habits. Start by taking time to chip away at your debt and get back on track. Then, open up credit accounts that help you establish positive payment history and build your credit.
Once your credit is on the rise, make on-time payments and keep your utilization low. As long as you are diligent about making payments, you should be able to bounce back over time.
What Is the Poorest Credit Score?
The lowest possible credit score that someone can have is 300. This is applicable for both FICO and VantageScore credit scores.
With this in mind, these types of scores are extremely rare. Only a handful of the population has a score so low that it hits the bottom of the range. Those who may have a lower score may be looking at anything from the high 400s to the low 500s.
But don’t fret. No matter how low your credit score might be, there are always rental opportunities out there for you.
Dylan Buckley is a freelance finance writer and editor with 7 years of professional experience. Specializing in personal finance, cryptocurrency investments, and Fintech, Dylan is deeply passionate about creating content that helps readers make informed, confident financial decisions. He studied finance in college and maintains a credit score over 780.