RENTING AN APARTMENT WITH NO CREDIT

Are you ready to move out for the very first time and be on your own but you have no credit history?  Well, getting that first apartment or place to rent might be challenging.  Do not think that a lack of credit is a bad thing.  It is not….  It just means you have no debt which is a good thing, plus you do not have other financial obligations. So as a result, you won’t have trouble making your rent payments.  You should be encouraged as there are ways of working around the system, so you can get approved for your very first rental. 

Steps to Renting your First Apartment.

Below are steps you can take toward renting your first apartment.

Step 1:  Only rent an apartment within your budget.  Determine what you can afford.  A good rule of thumb for this is to budget your rent to be no more than 30 percent or less of your monthly income.  In fact, do not consider anything higher than 30 percent.  Only rent apartments within your budget, even if you can get approved for a larger more expensive place.

Step 2:  Since most apartment complexes ran by management companies require a credit check, you can also consider renting from an individual owner.  Some individual owners will let you rent without a credit check.  The only requirements most likely will be is to prove your steady income by providing a few current paystubs.  If your income is not stable, having a savings account that has a balance that could cover several months of rent may suffice. Even with questionable credit, some apartment communities may consider renting to you if you have several months of rent already saved up.

Step 3:  Consider a roommate with established credit.  Finding a roommate with credit may offset your lack of having any credit yourself.  You can also consider a co-signer.  A relative or parent may co-sign for you, but remember, if you cannot pay the rent, they will be responsible for the rent payment.

Step 4:  Make an offer to move in right away.  Often, apartment communities that have several empty apartments may be willing to rent a place to you without a credit history if you can move in immediately.  Having empty apartments is costly for landlords because they are still having to pay the utilities and their mortgage on the empty apartment units.

Step 5:  Be willing to pay two or three months of rent upfront as a security deposit.  With a few months of rent paid in advance the landlord might consider renting to you.  Make sure this security deposit is in your lease as a payment, so you have proof of payment and can get the deposit back at the end of your lease.

Wait and Establish Credit.

If possible, hold off on moving into your first apartment to build some credit.  Building credit could take six months to one year to accomplish. 

There are many ways to establish credit.  Consider these techniques below:

Become an authorized user on someone’s card.  This is normally a parent or a close relative who has good credit standing. 

Start with a store or gas station credit card.   Many gas stations and retailers will give you a credit card even if you have no credit history.  Be sure to pay off the entire balance at the end of each month. 

Get a “Secured-Card” at a bank.  Applying for a “Secured-Card” at a bank requires a small deposit, for example $500.00.  With that deposit, you can obtain what is known as a secured card which in return will allow your bank to tap your account if you do not pay a bill. 

Student Credit Card.  Student credit cards are designed for young borrowers and can be a way of building a credit history.  Take note these introductory cards have disadvantages as well, so do your research on the type of credit card you are considering before applying.

FOLLOW THE GOLDEN RULE:

Remember to follow the Golden Rule!  PAY ON TIME!  This rule is for anyone building a credit score and credit history.  Paying on time is always a good personal and financial habit to have.  Also, do not use too much credit.   One credit card is enough.  No need for multiple credit cards and remember carrying too much debt can hurt your credit.

Keep track of your credit score:  You can get a free report at annualcreditreport.com and some credit cards will provide your score. 

Shreveport-Bossier Apartment Shoppers Guide, aptshopper.com can help you find your first rental apartment to call home.