Life happens -- and sometimes when it does, you fall behind on your bills, including your mortgage payments. With black marks in your past, you might feel less than confident about getting an apartment approval. Prior missed mortgage payments can affect whether or not you get approved for an apartment if the landlord checks your credit history. However, even with a less than perfect credit history, it's still sometimes possible to get the approval you want.
Your credit report is a summary of your credit history, while your credit score is a number based on an analysis of the information in your report -- and is an indication of your credit worthiness. Many apartment complexes use credit reports and/or scores to screen applicants. If you have missed mortgage payments on your credit report, your credit score is adversely affected -- in some cases by a drop of 40 to 135 points. Applicants with low or poor credit scores are often denied credit or apartment leases due to a poor history with prior creditors. However, not all landlords check credit history for apartment units. Larger complexes managed by professional companies are more likely to check credit reports than a single building owner looking to make side income from his property.
You know in advance if an apartment complex intends to run your credit report, as you must sign an authorization allowing them to pull your credit report. The apartment complex usually attaches this form to the rental application. Read all the fine print before signing it to see what credit reporting agency the apartment complex uses, as there are three main credit bureaus -- and sometimes, there are differences in the reports generated by each of the three agencies. If you are denied based on your credit report, the apartment complex must provide an Adverse Action notice stating the reason for the denial, the credit reporting agency used and its contact information.
Sweeten the Deal
In some cases, landlords approve applicants with poor credit history if they have financial incentive. A high income level might be enough to compensate for the flaws in your credit history. You might also get an approval if you offer to pay several months' rent in advance or increase the security deposit on the unit. In most cases, money talks. Offer the landlord more money and you'll get that approval.
Add a Co-signer
Without the income to sweeten the deal, you may need to get creative. Ask your potential landlord if he allows co-signers on his units. A co-signer adds his income and credit history to the application to make it easier to approve. In exchange, the co-signer promises to pay the balance on the lease if you default on your agreement.
Medical bills, job loss and death in the family are all unexpected events that can cause a financial hardship. Be upfront with your potential landlord and explain the deficiencies in your credit report prior to the application. You can also submit a personal statement explaining a blemish on your credit to each of the credit bureaus for them to include with your report. This way when someone, such as a landlord, pulls your full credit report, he'll see the explanation.
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