For young adults, an apartment of their own may be a necessity when a job takes them away from home. It is also one of the first major symbols of independence. For others, it’s a good alternative to the responsibility of ownership. Or it can be a practical solution to a job that entails frequent moves. Whatever the motivation, consider these questions before submitting a rental application:
What Affects Your Chances on Renting an Apartment?
Your credit report often plays a major role in whether you get an apartment, but it’s not the only factor landlords consider. Many conduct background checks into your rental history, criminal records, or whether you’ve had disputes with a former landlord. This type of consumer report is covered by the Fair Credit Reporting Act.
Can Landlords Refuse to Rent to You Due to Bad Credit?
If you have bad credit, you may have a hard time finding a landlord willing to rent to you. Landlords for larger complexes often use credit checks to screen prospective tenants. As long as landlords apply credit checks equally to screen all potential tenants, it’s perfectly legal. You may also be charged a fee to cover the expense of running a credit report or background check.
Will Missed Mortgage Payments Make It Difficult to Rent an Apartment?
If you’re a homeowner and paying your mortgage is a struggle, you may consider getting rid of your house or condo. If you decide to go that route, try to stay current on your mortgage payments until you sign a lease. Especially try to avoid a “strategic foreclosure” or a “deed in lieu of foreclosure” — essentially walking away from your house. This can have a serious negative effect on your credit score and your chances of renting an apartment.
Does Past Unpaid Rent Show Up on Your Credit Report?
Unless you were evicted from an apartment, or your former landlord sued you for back rent, it’s unlikely that the fact that you owe back rent will appear in a credit report. Negative rental history is not included in credit reports from any of the major credit reporting bureaus: Equifax, Experian, and Trans Union.
However, a collection account can show up on a credit report. And a consumer report that includes a background check might turn up the fact that you still owe money on another apartment. Many landlords are hesitant to rent to tenants with that kind of history. Your best hope is to find a landlord that doesn’t do credit checks.
Of course, managing and improving your credit score as a matter of routine is always good policy and can turn a lot of the potential issues we’ve just described into non-events. And your Credit Union’s free Credit Sense platform can help. It’s a smart one-stop shop for all things credit. You can see your credit report daily, discover/correct costly reporting errors, and enhance your score to save you money. Also, monitor and reduce credit card debt―and see how much you could save on existing loans (e.g. home, auto, other). Learn more here.
Does Renters’ Insurance Protect You From Natural Disasters?
Renters insurance will cover your belongings in case of a fire, or damaging rain and wind. However, if you rent an apartment in an area that is subject to frequent flooding or has the potential for earthquakes, you’ll have to purchase additional plans. Your landlord may have flood or earthquake insurance, but that policy doesn’t apply to your belongings.