Renting a place with bad credit

[socnerd]

Hi there,

I didn't know where else to post this but I had a question about trying to find a place to live. I have horrendous credit (20k in student loans, another 5-6k in credit card debt and over $1,000 in medical bills). The medical bills and credit cards have been in collection for literally years, I'm surprised they haven't sued me yet. I can only imagine that my credit score is as low as it can possibly be and I know that is going to be a problem when I try to find a place to rent. I know almost all places check your credit score, so I guess I'm asking is it going to be possible for me to find a place at all? I am likely going to be in DC and don't want to have to rent from some shady person in a bad part of town. Would it be impossible for me to get into an apartment complex? I don't have a job or any income but my parents will likely be paying all of my bills (as you can see, they are not so good at remembering to do that, they are very irresponsible with money and have passed it on to me). I feel like I am doomed and I am going to start grad school being homeless. I'm going to try to get a job but even if I do find one I'm sure it won't pay much. My program is Master's, not PhD so no money from the school. Even if I do try to pay off some of my debt my credit isn't going to look better for years. Also, I will not under any circumstances entertain the idea of having a roommate, I have had nothing but hell for the past 2 years with roommates and I need a space to myself, so that is not an option. Does anyone have experience with this situation? I am very worried. Thanks!

[captiv8ed]

Can you get a good reference from your landlord? That will help. We have a few issues that make rental folks edgy. We have been renting through a property management company and they let us put down a bigger deposit. The other option was a cosigner.

[socnerd]

Can you get a good reference from your landlord? That will help. We have a few issues that make rental folks edgy. We have been renting through a property management company and they let us put down a bigger deposit. The other option was a cosigner.

Probably not, my rent at the place I am living now (not technically college-owned but still campus housing) was always late. They even had to threaten to evict me a couple times because my mom was never able to pay it on time. I could have my parents co-sign but that probably wouldn't mean anything because their credit is worse than mine. I feel like I am completely screwed

[captiv8ed]

Yikes, that is tough. Do you have university housing options?

[pea-jay]

I rented with trashed credit so it's possible, but tricky. As a rule the presumption is people will do whatever to make the rent FIRST then deal with the other bills. So landlords are looking to see if THEY can get paid (and not have you trash the place). In the OP case this wont work, but if you have a good landlord reference, that goes a long way. But documentation on how much you will bring in can go a long way to alleviating the fear that they wont get paid. Generally you shouldnt pay more than a third of your income in rent or it starts to raise red flags.

You could also rent strictly through private parties that would find it inconvenient or a hassle to a credit check. I've done this more than once.

Offering a larger security deposit can grease the wheels as well

[kent shakespeare]

My credit is worse than yours.

I rent from small-time landlords, with whom the impression you make matter most.

Most of mine haven't even bohered to check credit. Granted, this is might be more approporiate to smaller cities than DC.

in my experience, apartment complexes always check.

[fadeindreams]

You can check your credit for free at www.creditkarma.com. It's reputable.

[coyabean]

Ditto all of the above. And keep in mind that bad credit is not new and people have been living somewhere, so, it's possible. You just need to clue into the local options.

One, check your own credit. Depending on the age of your debt your score may not be as bad as you think. And you can actually have good luck with large property mgmt companies because they can absorb loss easier and are usually more market driven because they have so many units to fill. The worse case scenario is needing a large deposit -- one to two months up front. Be honest. The good thing about the current economy is that bad credit has lost some of its stigma. Everyone is having problems. I see signs up in my town all the time nowadays with "recession" specials; read: we consider more than your credit score.

I also suggest entering "credit" into the CL search for your city. Some places market themselves as credit friendly on there especially when they are desperate to rent. And they won't say it to the general public but leasing agents will put out a temporary ad on CL.

Also, find a local apartment relocation specialist. They know the complexes that are more negotiable and you usually don't pay them; they are paid by the company once you sign a lease.

If all else fails get dressed up, explain your situation to some people at school and work the referral network. I doubt that a graduate student is going to be turned out. The alumni network is useful for things like this.

[urbanchic]

I hope you don't mind me asking this here, but can we rent without a credit card?

Or should I get a credit card and start trying to build up credit now ASAP if I want to lease this fall?

[socnerd]

I hope you don't mind me asking this here, but can we rent without a credit card?

Or should I get a credit card and start trying to build up credit now ASAP if I want to lease this fall?

I know that you don't even start having credit history until you've had a credit card for 6 months and I seriously doubt you can rent without one, at least not on your own.

Thank you everyone for the advice, this has become a huge nightmare and the happiness of getting accepted to grad school has been overshadowed by the fact that I might not be able to go to the place I wanted because of the high cost of living there. I know every time your credit score gets looked up it goes down because it counts as a "hit," so I don't want to do that, although I have used the online estimators because and it's estimated in the low 400s. I might have someone who could co-sign but I'm not sure if they'll do it, and I don't think I could get them to come down and do it in person anyway. The university housing options are very limited and likely require the same qualifying characteristics as other apartment buildings. It's apparently impossible to find a decent place (even a studio with no actual bedroom) that isn't overrun with roaches and crime for under $1500/month. I guess I'll just have to keep trying, thank you everyone for the advice!

[gsams]

Urban chic,

May I ask why you don't have a credit card? Yes you need a credit card for credit history - for an apartment, loans, etc. 6 months will not build up a good history, but it is a start. I have had a card since I was 16 and have EXCELLENT credit. Just pay off your balance in FULL. My Dad is a banker and this is what he recommends. Never put rent on a debit card. If you can do direct deposit (if that is an option with your landlord) that would work, too, but don't put it on a debit card because of hold situations that can bring you into the red. If you have a financial services organization on campus, I encourage you to talk to them about your options because you will need to arm yourself with this stuff. I know people will tell you credit cards are evil and blah, blah, blah, but mine haven't hurt me one bit. Because of it, I can get loans sans-cosigner and have no problem being approved. It also saved my butt when I was abroad for a year and literally EVERYTHING had to go on the card. Imagine the danger and headache with putting that on a debit card!

As for the OP,

Are there any lower-income housing options (not specifically just low income, but some that allow a certain number of tenants to be low income so they get a tax break) where you are going? I would call the housing office at your uni and ask about it. Can't hurt! LOL. I found many of these while not looking. With a fellowship, I don't think I would qualify, but some places are nice, nice buildings that would cut you a break with your history. If you aren't making much, then you should be able to manage it and qualify as "needy" enough to get an apartment. This seems common in mid-size cities. Other than that, try and find a landlord that will WORK with you. It sounds like you have been overtaxed with the financial situation,so you might want to sit down and decide how to make your CC debt and that medical debt (which makes me so, so angry because my area of research is politics and health care) go away. You might call your company and negotiate an APR change. Just keep paying and don't let it happen again. School debt is not a huge deal. I have about 20k myself at this point. That is manageable and differable until you graduate, so just focus on getting a better financial picture in the meanwhile. In reality, if you don't rack up any more CC debt or medical debt, you an pay that down EASILY in a couple of years and be debt free if you make it a priority. I, personally, would rather take out more in a private student loan with no penalty to pay back quick and a low rate and pay off that CC debt than let it keep eating you alive, but I know that probably is not an option at this time.

[coyabean]

I know that you don't even start having credit history until you've had a credit card for 6 months and I seriously doubt you can rent without one, at least not on your own.

Thank you everyone for the advice, this has become a huge nightmare and the happiness of getting accepted to grad school has been overshadowed by the fact that I might not be able to go to the place I wanted because of the high cost of living there. I know every time your credit score gets looked up it goes down because it counts as a "hit," so I don't want to do that, although I have used the online estimators because and it's estimated in the low 400s. I might have someone who could co-sign but I'm not sure if they'll do it, and I don't think I could get them to come down and do it in person anyway. The university housing options are very limited and likely require the same qualifying characteristics as other apartment buildings. It's apparently impossible to find a decent place (even a studio with no actual bedroom) that isn't overrun with roaches and crime for under $1500/month. I guess I'll just have to keep trying, thank you everyone for the advice!

Let's take this piece-by-piece.

1. I know that you don't even start having credit history until you've had a credit card for 6 months

Um, that is not true. Revolving credit (credit cards) are just one type of credit line. It is very possible to have a credit history without a CC. Actually right now it could be considered a good thing that you don't have one. Available credit combined with a low income and savings can be interpreted as an invitation for you to overextend yourself; also a bad thing.

2. I know every time your credit score gets looked up it goes down because it counts as a "hit,

Again, not exactly true. There is no penalty for viewing your own credit report. And even the minor hit it takes when being pulled by a potential creditor is probably not that big a deal if you're not having it done en masse.

I suggest pulling your own and using it to shop around. Have a copy or at least your fico score (www.fico.com) to give potential rental agents an idea of where you stand. They should be able to give you an idea without pulling your report. And then when you find a flexible place it's just one hit for the final credit pull.

3. co-sign but I'm not sure if they'll do it

Actually, that should do it just fine. All a place wants is someone they can harass if you skip out. A co-signor is common in university towns.

4. I don't think I could get them to come down and do it in person anyway.

Again, common issue. That's why almost every renting agent will have a guarantor form that can be notarized and mailed back to them.

It is important to remember, again, that you are NOT the first person to ever do this. All kinds of processes are in place for students just like you.

Also, remember that renting agents need tenants about as badly as you need a place to stay. With access to guaranteed student loan money and a fellowship/stipend offer in hand from an area's likely number one employer you are actually a better risk than an employee with perhaps better credit right now.

Relax.

[captiv8ed]

You can rent without a credit card. We didn't get one until about 5 years ago, and never had trouble renting before that.

[BionicKris]

I've been told by multiple sources that if your credit report is requested too much that your score can drop, but I do not believe it is a significant amount. I think it has something to do with consistently applying for credit and not getting it. The more you apply for credit and get denied, the more companies inquire about your credit history. Honestly it's a flawed system. It seems like if your not rich, the climb to great credit is a steep, and damn near perpendicular climb.

In response to the person that opened this thread, it may not be of much help but my boyfriend has a pre-existing condition and can't get adequate medical coverage. He is thousands of dollars in debt, years old by the way, and told the apartment complex this up front. They replied by stating that they do not include medical debt in their decision. I do not know if this is universal or not but it's worth asking the place you plan to rent from up front.

If you can't get a co-signer, just be up front about your situation. It never hurts to be honest. Your security deposit will be incredibly huge with bad credit, but as long as you can show them that your rent will be paid they might be willing to work with you. It'll also benefit you to try to contact some collection agencies and start paying down your debt - even if it's just 50 bucks a month. When you get ready to rent, you can at least show the people you lease from (with?) that you've been paying on your debt. They might take that into consideration as well, because though your credit is bad, your paying on your debts. Good Luck!

[johndiligent]

You can rent without a credit card. We didn't get one until about 5 years ago, and never had trouble renting before that.

Seconding this. I'm in my mid-20's, I've never had a credit card, and I've rented several apartments without ever having my credit checked. Don't live in a complex, rent an apartment in a house. Not only will you get a nicer apartment (yay for character and individuality), but you'll probably also get a nicer landlord, for whom it's more of a hobby than a business.

[socnerd]

Seconding this. I'm in my mid-20's, I've never had a credit card, and I've rented several apartments without ever having my credit checked. Don't live in a complex, rent an apartment in a house. Not only will you get a nicer apartment (yay for character and individuality), but you'll probably also get a nicer landlord, for whom it's more of a hobby than a business.

I wish this were possible in DC but there are no places to rent that aren't managed complexes. It does look like I will have someone to co-sign with me so maybe that will help, I'm waiting to hear back from a few more schools before I really commit to any place but I thank everyone for their advice!

[MikeRoger]

I have tried on couple of occasions,but never succeeded.Could you give some more information on how to avoid credit check?

[aginath]

I faced the poor credit issue when I moved to Georgia. I, too, received the advice about getting a letter from a previous landlord, but I was a homeowner for more than five years before moving. I stuck to Craigslist and found a landlord who owns a handful of properties and doesn't conduct credit checks.

When I lived in DC for a summer 10 years ago for an internship during grad school, I saw lots of sublets and individual owners in the classifieds. The properties were usually townhouses or old houses that had been converted into duplexes/triplexes.

[Alyanumbers]

How about sharing a flat with other students? You don't need good credit for that, do you?

[aginath]

How about sharing a flat with other students? You don't need good credit for that, do you?

Depending upon landlord and lease terms, yes. Some management companies (and individuals) require that all persons staying in the residence for longer than a certain period of time (generally a month) must be added to the lease. Furthermore, to be added to the lease, you must submit to a credit check. Granted this isn't always the case, but it can be.

[rising_star]

Depending upon landlord and lease terms, yes. Some management companies (and individuals) require that all persons staying in the residence for longer than a certain period of time (generally a month) must be added to the lease. Furthermore, to be added to the lease, you must submit to a credit check. Granted this isn't always the case, but it can be.

But, if you can avoid going through a management company, this may not be difficult. My first year of my MA and the first two years of my PhD I lived with roommates who either owned the place themselves or their parents did. I didn't have to do a credit check or even provide references in either case. In both cases I did have a lease.

[juilletmercredi]

Never put rent on a debit card. If you can do direct deposit (if that is an option with your landlord) that would work, too, but don't put it on a debit card because of hold situations that can bring you into the red.

That would only put you in the red if you didn't have enough money to make your rent in your account. I also don't know what you mean by hold situations, because whenever I've paid a large bill with my debit card they just take it out immediately. If you monitor your account and don't spend more than you have, you shouldn't go into the red. It's really not any different than paying your rent with a check, which I did for three years successfully without ever over drafting my account.

And referring to the roommate issue - I had a lease on my apartment with my first roommate, who moved out. After that, I found a second roommate on CL who went to my school and moved her in. She didn't have to go on the lease and she never went through a credit check. There are tons of sublets or situations where one roommate is moving out for a year or more and the other roommate(s) need someone to take their place(s) so they can keep their apartment, and usually they don't require you to hop on the lease. Check out things like CL, and your university's off-campus housing office.

[michigan girl]

I live in a low cost-of-living area and I pay rent by check. Never use debit/credit cards! Although my due date is the 1st, I have until the 7th to submit the full amount without late penalty. Look for apartments that give you that flexibility/relief. When I'm running low on money, I always slip the rent check underneath the leasing office door on the 6th/7th. The landlord won't deposit until the 10th-12th.

Also, is there any reason why you cannot live in campus housing?