Can You Rent an Apartment with Bad Credit?

Credit.com

The housing market may still be difficult for many consumers to reenter following an economic downturn that may have played havoc on their finances and credit standing. As a result, many people may be on the lookout for rental properties that are both comfortable and affordable.

However, those with bad credit have likely run into a problem: because competition for rental properties is so fierce, landlords currently have a significant incentive to only rent to those whose credit is top-notch. As a consequence, consumers who are looking to move out of their current rental property and into a new one might want to consider the value of checking their credit report and identifying either erroneous entries that might be unfairly reducing their credit standing (estimates show as many as 80 percent of credit reports contain such an error) or otherwise target areas where they could stand to make some improvements.

A credit report will list all the lines of credit currently ascribed to your name, and might help you to figure out the ones that are causing the most problems for you. By working hard to reduce those problems, you might be able to improve your credit standing over the course of a few months and put yourself in a better position to qualify for the type of rental properties you want.

Furthermore, home prices rose significantly on a month-over-month basis in February, according to the latest data from the home price analytics and tracking firm CoreLogic.

“Home prices nationwide, including distressed sales, increased 10.2 percent on a year-over-year basis in February 2013 compared to February 2012. This change represents the biggest year-over-year increase since March 2006 and the 12th consecutive monthly increase in home prices nationally,” according to the CoreLogic report.

If this trend continues it could put additional pressure on those with diminished credit scores.

Errors on a consumer’s credit report can be cleared up by contacting the credit bureau that issued the document, but if any are noticed, it’s usually wise to also order copies of the document from each of the other two credit bureaus to make sure the same mistakes aren’t also on those.

“Just because an item is disputed doesn’t mean it will be fixed,” writes Credit.com’s Director of Consumer Education Gerri Detweiler. “Here is how it works: When you dispute an item, it is coded using a two- or three-digit code corresponding to the reason for the dispute (‘account not mine,’ for example). While this can be done online, if you choose to mail in your dispute, the person processing it will code it. The consumer reporting agencies’ computer then ‘talks’ to the furnisher’s computer. If the item is ‘confirmed’ as correct, you’ll be told that. If the furnisher does not respond, it will be removed. If the furnisher confirms there is an error, it will be corrected.”

If you need help addressing the problem, check out Gerri’s step-by-step guide to disputing credit report mistakes.

[Related Article: Can A Credit Report Error Be Too Old To Fix?]

If you want to see what’s in your credit report, you are each entitled to a free copy of our credit reports from the three major credit bureaus once a year through the site AnnualCreditReport.com. Beyond that, you can use Credit.com’s free Credit Report Card for an easy-to-understand breakdown of the information in your credit report, along with your credit scores.


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