What’s the average credit score you need to rent an apartment?
So you've found your dream home—but are you financially ready and capable of applying? In this article, we’ll break down what credit score renters need in order to secure the apartment of their dreams in their desired building and location.
A strong credit score is more than a number. It’s a financial passport that significantly impacts various aspects of your life—including renting an apartment. It paints a clear picture of your financial reliability and gives landlords a good idea about whether or not you'll be able to meet your financial obligations. If you’re curious about how your credit score fares against the national average, we'll clue you in on the different scores needed to rent an apartment and how you can strengthen your own.
What is a credit score?
A credit score is a three-digit numerical representation of your creditworthiness ranging from 300 to 850, with higher scores indicating better credit health. Several factors contribute to this score including payment history, credit utilization, length of credit history, types of credit used, and new credit accounts.
Why do I need a good credit score?
Landlords often view a solid credit score as an assurance that you’ll fulfill your financial commitments on time. A good credit score can also open doors to better rental opportunities, offering more choices in terms of location, property types, and more favorable lease terms. Plus, a good credit score makes it easier to access loans and additional credit if you choose to buy a home down the line.
Factors influencing credit score requirements for rentals
While there’s no standard credit score requirement across the board, several key factors influence the average credit score you need to rent an apartment:
Location and type of rental property
Credit score requirements can vary based on the location of the rental property and the type of apartment complex. In metropolitan areas or upscale neighborhoods with high demand, landlords might impose stricter credit score standards compared to rural or less competitive rental markets.
Individual landlord or property management policies
Credit score requirements can also hinge on the discretion of the landlord or property management company. For example: some landlords might prioritize other factors like stable income or rental history while others could adhere strictly to a minimum credit score threshold.
Property size and rental market conditions
In a competitive market with high demand and limited availability of such properties, landlords can afford to be selective and prioritize applicants with better credit scores. On the other hand, in a market with high supply, landlords may be more lenient with credit score requirements to attract tenants swiftly and avoid prolonged vacancy periods. This is especially true for smaller or less exclusive properties where demand might not be as intense.
Average credit score for renting an apartment
According to Experian’s Q2 2023 Consumer Credit Review, the average credit score is 716. While averages can provide a general idea, pinpointing an exact average credit score needed for renting an apartment can be challenging due to the aforementioned variables. Here’s a look at the different credit score categories and how they might impact your ability to secure an apartment.
800-850
Scoring above 800 on a credit report signifies an exemplary financial track record, reflecting a history of responsible borrowing, timely payments, and stellar financial management. If you fall within this category, it gives landlords the confidence that you’ll be an ideal tenant. Tenants in this credit tier are perceived as exceptionally low-risk, giving landlords good reason to prioritize your application over others.
740-799
While not as strong as a credit score of 800+, if you have a score within this range you’re still likely to get approved for most apartments. A credit score in this range portrays financial responsibility and might lead to more favorable rental terms, lower security deposits, or increased flexibility in negotiating lease terms.
601-739
Although credit scores falling within the range of 601 to 660 are generally regarded as fair and indicate a moderate level of creditworthiness, a score closer to 739 is considered better. A fair credit score suggests a history of managing credit decently but may include instances of occasional late payments or higher credit utilization, which might concern potential landlords. As a result, you might have a higher security deposit, co-signer requirements, or be rejected outright. If your score is closer to the 739 end of the range, you have a higher chance of being approved. However, even though it demonstrates more responsible financial behavior and indicates a lower credit risk than someone with a score of 600, you may still end up not getting your first-choice apartment, for example, a luxury, high-end unit in a high-demand location.
300-580
Scores in this range may indicate a history of financial challenges such as late payments, high credit card balances, past defaults, or other negative marks on the credit report. A score of 300 to 580 suggests a higher credit risk and therefore might make lenders hesitant to extend credit or landlords less likely to approve your application, leading to more rejections.
If your score is within this range, you’ll likely encounter difficulties when securing loans, applying for new credit cards, or renting a home since your credit profile implies you’re less reliable or more prone to financial setbacks. The good news however, is that there are several ways you can improve your credit score before you begin applying to minimize these challenges.
What to do if you have bad credit
If you find yourself with a credit score below the expected threshold, there are several things you can do to mitigate its impact:
Provide additional documentation
Supplementing your rental application with additional documentation, such as proof of income, letters of recommendation, or a history of timely rental payments, can demonstrate your reliability in spite of a lower credit score.
Offer a larger security deposit
Another way to alleviate concerns for landlords and increase your chances of securing a rental unit is to offer to pay a larger security deposit. This increased deposit acts as a form of collateral and could increase the landlord's willingness to approve your rental application.
Secure a co-signer or guarantor
Having a co-signer or guarantor with a stronger credit history serves as an extra layer of financial security for landlords. In case you face financial difficulties or can’t afford rent one month, a co-signer or guarantor can step in to cover payments, giving landlords peace of mind.
Get recommendation letters
While a glowing letter of recommendation from a former landlord might not singularly secure you an apartment, it could serve as a valuable addition. In the absence of prior rental experience, securing a reference letter from an alternate source like an employer could also be beneficial. References like these can complement your rental application and provide a more comprehensive view of your reliability and character, potentially strengthening your case as a prospective tenant.
Show proof of your savings
Rental applications ask for your income details, but this alone doesn’t always provide landlords with the complete picture of your overall financial worth. Providing evidence of your savings shows landlords you have a financial cushion to cover expenses in case of temporary income disruptions, emergencies, or unexpected circumstances during the lease period.
Strategies to improve your credit score
Your credit score can impact a landlord’s decision about whether or not to approve your application. If you want to boost your chances of securing an apartment, follow these strategies to increase your score.
Apply for a credit card
If you have no credit, applying for a credit card is a good way to demonstrate that you can use a credit card responsibly and that you can handle credit responsibly. Additionally, establishing a credit history via credit card creates a track record that future lenders or landlords can use to assess your creditworthiness and reliability in meeting other financial obligations.
Reduce debt
The credit utilization ratio, which measures the proportion of credit card debt to your total credit limit, is the second most crucial factor when determining your credit score. To maintain a healthy ratio, strive to clear your credit card balance entirely each month.
Setting up autopay for your credit cards can make it much easier to stay on top of payments. If you can’t afford to make the payment in full, strive to at least make the minimum monthly payment and consider targeting a utilization rate of 30% or lower to keep your bills manageable. Additionally, asking for an increase can help lower your utilization rate. However, this option should only be considered if you are able to completely pay off your bills every month and are in a financial position where asking for an increase makes sense.
Minimize hard credit inquiries
Hard inquiries can negatively affect your score because they signal to lenders that you might be taking on additional debt. Each hard inquiry can potentially reduce your score by a few points and multiple inquiries within a short period could significantly impact your creditworthiness.
Limiting these inquiries helps you maintain a more stable credit profile, signaling responsible borrowing behavior to creditors and giving you more credit opportunities in the future.
Fact check your credit reports
Even the smallest mistake on your credit report can knock your score down. If you come across an error such as an incorrect account balance or a missed payment that you actually made, you can dispute it with the credit bureau responsible for the inaccuracy. You should also make it a habit to check credit card accounts you aren’t using frequently to prevent unauthorized charges or potential identity theft that could negatively affect your credit score.
Report rent payments
Ask your landlord or property management company if they report your payments. If they don’t, you can get credit for the rent you pay by either using a rent reporting service, a rental payment platform, or a rent tracking application. Reporting your rent payments to one of the three major credit bureaus (Equifax, Experian, or TransUnion) will not only help you improve your credit score, but will also help you build a positive credit history.
Boost your credit score with RentSpree
An excellent credit score takes time to build and maintain. Fortunately, practicing responsible credit behavior can set you on the right path to achieving financial health and increase your chances of securing the apartment of your dreams.
With RentSpree’s Credit Builder, we make sure your rent payments are directly reported to TransUnion so your timely payments don’t go unnoticed. Whether it's applying for an apartment or buying a new house, RentSpree can help you reach an ideal credit score and accomplish your financial goals.
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