Renting an apartment can be difficult when you are new to the workforce. Here’s how to remove it.
To rent an apartment, you need more than just a regular salary. You also need a decent credit score. Your credit score indicates how consistent and on-time you are when paying bills, and it’s natural for a landlord to want reassurance that you’re likely to pay rent after signing a lease.
But what if you’ve never rented a house, never had a credit card in your name, and hardly ever had to pay recurring bills? If you’re new to the job market (for example, as a recent high school or college graduate), this could easily be the case.
And that could prove to be problematic, because if you don’t have a great deal of credit history, the reporting bureaus that determine credit scores may not be able to give you one. And that, in turn, could prevent you from being able to rent a house. If this is your case, here are some possible solutions.
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1. Get someone to co-sign your lease
You may not have a strong enough credit history to achieve a credit score, but your parents can each have their own unique credit rating. Or, if you have older siblings, they may also have a credit score.
Often times, a landlord will allow someone with good credit to co-sign or secure your lease. That way, if you are behind on your payments, that other person on your lease will be responsible.
Of course, you should only really ask a family member to co-sign a lease if you know you will be able to pay it yourself. You don’t want to reward someone’s kindness by charging them the price of your rent. But assuming you’re more than able to afford your lease and your missing credit history is the only thing holding you back, this might be a good way to go.
2. Offer to deposit several months’ rent
You may not have someone who is able or willing to co-sign your lease. If so, you may be able to get a landlord to give you a chance by paying rent several months in advance.
Usually, when you sign a new lease, you pay your first month’s rent plus a security deposit equal to a full month’s rent. This security deposit protects your landlord in the event that you cause damage to the place you are renting or fail to pay future rent. But that deposit alone may not be enough to convince a landlord to rent you. On the other hand, if you offer to pay, say, three months’ rent in advance, that buys additional protection for the landlord.
3. Show proof of savings
If you have a large amount of money in a savings account, a landlord might take that into account when deciding whether to let you sign a lease without a credit score. Suppose you sign a lease for a rental that will cost you $ 1,000 per month. If you show your landlord that you have $ 15,000 in savings, that means you have enough money to cover the term of your lease, even if you were to lose your job immediately after signing.
Homeowners need protection too
While you need a stable income to rent a home, you also need to prove that you can be trusted to live up to the terms of your lease. This particularly applies nowadays, given the ban on deportation that has been in place since the start of the coronavirus epidemic.
During the pandemic, many tenants lost their jobs through no fault of their own, and in turn, many landlords had to sit idly by and do nothing while their tenants did not pay rent for months. It was a lose-lose for everyone involved. And that’s why right now, a lot of landlords fear they’ll get stuck in a situation where a lease is signed but a tenant doesn’t end up paying.
Due to this situation, you may need to take extra steps to rent an apartment, especially if you do not yet have enough credit history to have a credit score. But if you try these tactics, you may be able to overcome this obstacle and carve out a niche for yourself.