Renting an apartment with no credit history in the US

[tristramshandy]

Hello All,

I'm an international student about to start looking for apartments in NYC. I was wondering if someone could share their experiences with landlords. Did you encounter any trouble with landlords requiring some sort of security from international students? My parents would be willing to co-sign the lease if necessary. However, I don't have much time to find an apartment and am hoping to sign the lease on the spot without too much hassle, paperwork etc. Should I bring along any specific documents proving that I can afford the house/that my parents would support me financially? Is it a huge problem that I won't have a SSN or credit history???

Any help would be very appreciated!

[Usmivka]

My labmates are both Canadian, and had a colossally difficult time with finding a first rental. Both ended up living for about 6 months in what were essentially boarding houses with the landlord on site in order to establish a rental history. But I know plenty of other folks (also all Canadian, so this may not be totally applicable if you are moving from elsewhere) who had smooth transitions and just used their history of bill payment as a substitute for credit history. A letter in hand from your parents, a printout of your bank account showing sufficient savings to pay 5-6 months of rent, and a letter of support from your graduate institution confirming you have a job (grad stipend) and what the pay is should be plenty so that you can sign on the spot. But this is all anecdote, so I defer to any international students who want to comment.

ps Your University's grad student housing will avoid all these prereqs and any issues, and will give you a rental history. This could be worth it to avoid the hassle when you first move, and they often allow month to month leases, so you could move into your own place whenever you have sufficient credit history. Also, as an international student, you won't have to pay state taxes on any stipend income if and only if you live on campus in school housing. Off campus, you will be responsible for both state and federal taxes.

[TakeruK]

My wife and I are Canadians with no US credit history and trying to find an apartment in California for Sept 2012! So far, we've submitted one application but unfortunately, someone else beat us to it so they just kept our stuff on file. The landlord seems to be knowledgeable in working with International people and so far, it doesn't seem to be a problem but they haven't actually processed an application yet. We will be flying down at the end of the month to try to find something and I can hopefully give an update by then.

We were also worried about paying for deposits etc. without a US bank account. We asked a potential landlord and our own bank (where we have a US-dollar bank account at a Canadian bank) and they said the best thing to do is to get money orders from your own bank before you leave. For example, get several ~1000 USD money orders, which only take a few days to process, and use that to pay for first months' rent and deposit. It could be helpful to have some of these on hand, if possible, because it shows you will be good for the first few months' of rent. If you are transferring some of your savings to the US, the bank recommends doing a bank draft, but these take up to 30 days to clear in the US, so it is not always ideal for upfront expenses. Both money orders and bank drafts are guaranteed funds (unlike a personal cheque) but they are safer than carrying around large amounts of cash!

We also considered university-owned off-campus housing but the wait list for that is too long, it doesn't look like we will be able to get a place. However, we didn't read anything about state tax exemption in California, even for on-campus graduate student residence, so this might be something that varies between states.

[m84y]

I am an international student living in NY as well. Finding an apartment was a huge hassle for me. Most landlords will not accept your application if you have no credit history. I was rejected from one apartment because of no SSN. They might let you pay for a year's rent up front, but in NYC that is a lot of money that us grad students usually don't have lying around. They will take a co-signer but they have to be American and living in the Tri-state area. I ended up going with a Guarantor company in order to get my apartment. You have to apply to the guarantor and give them your financial information. The application process isn't too bad. You also have to pay them around a month's rent as a fee. Not all landlords accept Guarantors but there are quite a few in the city who do.

Let me know if you need any more information!

[tristramshandy]

Thank you, everybody! I think I've resigned to the idea that I might need to put down a big chunk of money up front! I didn't know that there was the option of applying to a Guarantor company, m84y. Thanks for letting me know.

[TakeruK]

Hi everyone! Just wanted to give our very recent experience of finding an apartment in the US as Canadians with no US credit or rental history!

We arrived here in Pasadena a few days ago and we looked at a bunch of places on the first day. We saw something we liked right away and after looking at a few others, we were sure we found the right apartment for us. The landlord said he has had tons of experience renting to foreigners without US history and everything should be okay. Just to be safe, we gave him a ton of information -- letter from school stating my stipend and that I'm accepted, letters that confirm I received a fellowship, even past acceptance letters to prove my current MSc stipend is what I say it is. For my wife, we also included copies of her pay stubs for the last 3 months.

The landlord said that new California law says it's not longer legal for landlords to require a minimum income (e.g. 3x the rent) but some shady landlords will find some other way to exclude people on that criteria anyways. Instead, we just have to prove that we are capable of paying rent, so our bank statements showing our savings is good enough. Finally, we also included a copy of a recent credit history report from Equifax, one of two companies in Canada that provide annual free credit history reports. It turns out that Equifax and Transunion both exist in USA too so it's likely they can communicate some information from Canada.

Anyways, the end result is that we did get "conditionally" approved for renting the apartment. The only difference between us and a domestic renter is that our security deposit is $300 more. The only upfront costs were $300 holding deposit (applied towards first month's rent) and $60 credit check fee ($30 for each adult). When we move in, we will have to pay the first month's rent and the security deposit. We didn't need a cosigner, nor did we need to pay any additional rent upfront!

So, I think it helps for international students if we found an apartment rented by a knowledgeable landlord, e.g. a landlord company that owns many buildings and has a lot of renters. We found on craigslist a lot of places that were owned by a person, or sublets, and they were asking for a lot more requirements, including minimum income! (Minimum income doesn't work for us since my wife won't be able to work right away in the US, we will have to get her J-2 work authorization first!). In addition to experience renting to foreign tenants, a big landlord company is able to absorb losses if a renter defaults (or they have good insurance) so they are also more likely to "take a risk" on a foreign renter!

Edited August 2, 2012 by TakeruK