Banking and Finance

Can I Rent an Apartment or House With a 640 Credit Score?

July 27, 2021

According to credit scoring models, a 640 credit score would still put you in the “poor credit” range. To qualify as having “fair” credit, you need a credit score of at least 650. However, when renting an apartment or a house, the closer you can get to 700 the better.

If you have a credit score of 640, you may be wondering if you're able to rent an apartment or house. Unfortunately, the answer is not always straightforward. However, there are a few things you can do to improve your chances of being approved for a rental. 

In this guide, we'll explore what factors landlords look at when approving tenants and offer some tips on how to increase your credit score. Let's get started!

Do I Need a Credit Score to Rent an Apartment or a House?

If you're looking to rent an apartment or a house, you may be wondering if you need a credit score. The answer is that it depends on the landlord. Some landlords may require a credit check as part of the application process, while others may not. If your credit score is low, it may still be possible to rent an apartment or house, but you may have to put down a larger deposit. 

Ultimately, it's up to the landlord to decide whether or not to require a credit check. So if you're concerned about your credit score, be sure to ask before you apply.

Picture source

Why Does a Landlord or Property Manager Need to See Your Credit Score?

Let’s start by answering the main question: What are the requirements to rent an apartment? Most landlords will require that you have a steady income and a good credit score. They may also require that you have a cosigner or a guarantor. Additionally, you'll need to provide proof of renters insurance. Once you've met all of the requirements, you'll be able to sign the lease and move into your new apartment.

But, the question remains. Why do they even need to look at your credit score at all? They want to know if you're likely to pay your rent on time, and they also want to see how much debt you currently have. A high credit score means you're a low-risk tenant, which is often attractive to landlords. On the contrary, a low credit score may indicate that you're more likely to fall behind on rent or be irresponsible with payments.

In either case, your credit score can impact your landlord's decision to approve or deny your rental application. So, if you're planning on renting an apartment or house, be sure to check your credit report in advance so you can address any issues that may come up.

FAQ: Does a lease application count as a hard inquiry? Yes, it does. However, a landlord or property manager needs your permission before performing this type of hard credit check. So, this will never happen without you knowing.

What Credit Score Do You Need to Rent an Apartment or House?

So, what is the minimum credit score needed to rent a house? Do you even need good credit to rent an apartment? Unfortunately, in most cases, yes, you do need good credit when renting a house or apartment. Likewise, the minimum credit score needed to qualify for a regular rental property is typically 600. 

Unfortunately, there's no easy answer, though. Each landlord is different, and they all have their own minimum credit score requirements. That said, it's generally safe to say that you'll need a score of at least 600 to 640 to qualify for most rental properties. So if your score is lower than that, you may want to start working on increasing it before you start your search for a new place to live.

FAQ: Why is a credit score of 700 important for a tenant application? According to credit scoring models, having a credit score of 700 means you have “good” credit. This is what most landlords look for when evaluating your application, so it’s nice to have (but not entirely necessary).

Picture source

Tips for Renting With Poor Credit

Having trouble finding an apartment that meets your needs and your financial situation? Here we have some tips for you to rent with poor credit or no credit at all. 

Find a Private Landlord Who Requires No Credit Check

Aside from trying to find houses for rent with no credit check or apartments that accept bad credit, you might try working with a private landlord. 

Often, private landlords don’t require a credit check. Instead, they’ll evaluate your application based on your rental history, income, and other financial factors. Keep in mind that renting with bad credit but high income is possible. However, if you’re still having trouble, try implementing the following tips.

Find a Co-Signer

If you're looking to rent a property but your credit score isn't great, you may be able to get approved if you have a co-signer. A co-signer is someone who agrees to be responsible for the rent if you don't pay it. This can be a family member or friend. 

Having a co-signer can help your application because the landlord will see that there is someone else who is willing to take on the responsibility if you can't make the payments. This can be especially helpful if your credit score is around 640, which is considered “poor” or “fair” depending on the credit scoring model. Keep in mind that having a co-signer does not guarantee that you will be approved for the rental property, but it can improve your chances.

Pay in Advance

Another way to make yourself more attractive to landlords is by offering to pay rent in advance. This shows that you're committed to the property and are willing to put your money where your mouth is, so to speak. In addition, it can help to offset any concerns that the landlord may have about your credit score. 

Of course, you'll need to be able to afford the upfront cost of paying several months of rent, but if you're confident that you can make the payments on time, this can be a great way to secure a rental property.

Report Your Rent

Building your credit is the best way to ensure you can access the rental properties you’re interested in with ease. However, if you can’t improve your credit by paying off debt, reporting your rent is a fantastic way to quickly boost your score. In fact, it may make you qualify for your dream apartment within as little as one month. 

What is rent reporting? It’s a process through which rental payments are recorded on a tenant's credit report. This information can then be used by landlords and other creditors to make better-informed decisions about rent payments and other financial obligations.

To start rent reporting, you must first provide your landlords with permission to do so. Once they have this permission, landlords can then begin reporting your rent payments to the major credit bureaus. However, for landlords, this can be a complex process that requires a lot of time and energy, so they normally won’t do it by themselves.  

Several third-party platforms now offer the ability to easily report your rent. After you show proof of rental history and payments (via a signed contract or other official documents), the rent reporting services will verify with your landlords and report them to the credit bureaus. Overall, it’s a great way to build up a solid payment history on your credit report. 

Report Your Rent With Cheese

Having a credit score of 640 isn’t terrible, but you might find it difficult to get approved for certain rental applications. Ready to report your rent in an effort to improve your credit? 

Cheese is excited to announce our new rent reporting feature, launching in December 2022. This feature will make it simple for you to report your rental payments, whether you choose to report up to two years of previous rental payments (for a one-time $49 fee) or want us to report ongoing monthly payments now (for a $5 monthly fee). 

Ready to get started? Sign up here to be one of the first to access this feature once it goes live in December!