Renting with a High Income and Bad Credit
Real Credit Repair Results, W/no Monlthly ongoing fees
Credit score dictates many of the major events and ties to the major purchases in our lives. With a great credit score, you can not only get approved for just about every offer under the sun but you can get them at the best interest rates possible. Thankfully, we specialize in credit repair and can help those with a subpar score get back on track.
These factors are essential when purchasing a home, obtaining a private student loan, applying for credit cards, and so much more. The better your score is, the more likely you will be approved for whatever you want and you will save so much more money on interest rates than you would have with a bad score.
And having a bad score can be a major hindrance. Even if you can get approved for something mentioned previously, you will likely face some of the steepest interest rates in the industry. That means a lot more money out of your pocket in the long run just to get approved for that product or loan.
How Bad Credit Happens
The thing about bad credit is that it isn’t the same for everyone. Those who have it get to that point for different reasons but the fact is the same: bad credit will hamper their lives in a substantial way. But understanding how you got to that point can be important if you hope to change things for the better in the future.
First and foremost, it is important to understand what a bad credit score is. There are three different credit bureaus in the United States plus FICO. FICO is the largest credit reporting firm in the country and often one of the most relied-upon sources for credit scores.
According to FICO, a “poor” credit score ranges from 300-579. A score of 300 is the very bottom of the line. Only 4% of Americans have a credit score under 500 so it takes some substantial bad work to land that low on the totem pole.
Landing this kind of score happens for a variety of reasons. A bad payment history or too much credit utilization are the most prominent reasons. Those two factors account for 65% of your credit score according to FICO and negative marks in those categories can have a major impact.
Of course, there are times where an account is closed due to delinquent or absent payment, a foreclosure or repossession happens, or a bankruptcy has taken place. Those are all major negative marks against your credit report and should be avoided at all costs.
And arriving at this credit score does not mean that you are a bad person. It doesn’t even mean that you’re irresponsible. There are circumstances in life that can result in even the most responsible of people missing payments or having a bankruptcy happen.
As a matter of fact, one of the biggest contributing factors of bankruptcy in the United States pertains to medical bills. An unfortunate accident can lead to a mountain of medical bills and that can put even the most responsible of people in a hole from which they cannot emerge.
No matter how you arrive at a bad credit score, the story is the same and that story is one of struggle when looking for approval. A bad credit score can even make it difficult for you to rent an apartment since landlords consider your credit score as well.
So enough about how someone gets into the “poor” credit rating section and more about how you can still get an apartment even with that bad credit score. The answer can potentially be in your income and how you present it to your employer.
Getting an Apartment with High Income
The reason why your future landlord checks your credit score is that they are looking at all of the things in your life that show how reliable and trustworthy you may be as a tenant. They want to make sure that you will pay your rent and do so in a timely manner. After all, no landlord wants a tenant that they will have to chase around just to get the rent.
So when they look at your credit score, they are gauging how reliable you may be when it comes time to pay the bill. If they see negative marks on your credit score, they may think of you as unreliable and be unwilling to rent you an apartment.
But your income can be a saving grace. At the end of the day, your landlord wants to ensure that their investment is protected and that they get their rent each month. If you can show that you make more than enough money to be reasonably responsible, your landlord may be willing to look past your negative credit score and take you on as a tenant.
Generally speaking, it will take around 40 times the monthly rent total in yearly income to be able to sway your landlord. For instance, if the rent is $1000 per month, you would need to have an annual income of $40,000 to be able to cover that safely.
Of course, you will need to be able to prove your income level to a potential landlord. You can typically use your last two pay stubs to prove this but some landlords will also accept tax returns as proof of your income as well.
So even if your credit score can use some serious work, having enough income can possibly offset that and allow you to get the apartment that you are looking for. Even if that doesn’t do the trick, there are other methods that you may be able to turn to.
Maybe your income isn’t quite high enough to meet the aforementioned criteria when it comes to swaying a potential landlord. But if you have significant savings built up, that can be the key to changing that landlord’s mind.
To go this route, you will need to have a few months saved up. Try at least two or three months of rent. That is no small amount but it can be enough to show your potential landlord that you have the funds needed to pay your rent and pay it on time.
The key here is that you stay on time with your rent. Even if your savings can get you a head start on your rent, missing a payment at any point will not help you. Make sure that you are consistent and on time with your payments.
Things such as these depend on where you are renting too. There are some rental companies that are a bit bigger and less flexible on allowances such as these. If you can rent through a private landlord, they are more likely to make amendments or changes to their requirements.
Put More Down Up Front
If you do have a high income and find that a bad credit score is keeping you out of the apartment that you want, try putting that higher income to use. If you can, save for a couple of months so that you can potentially put more down.
Again, your landlord is looking for an assurance from you as a potential tenant. Sure, your credit score can be bad but they just want to make certain that their investment is protected. Being able to provide that reassurance can come in a number of forms.
Generally speaking, most landlords will require the first month’s rent as well as a security deposit up front before accepting a tenant. If your credit score is keeping you from getting the apartment that you want, try offering more up front.
So instead of having to pay that first month and the security deposit, try paying two months or three if you can manage it. That up-front payment may be enough to sway a landlord into feeling that you are trustworthy enough as a tenant.
This is no small feat to pull off so you will need to save ahead of time. But having those extra funds right away may be the difference between getting a place of your own in a bad neighborhood or in one that you can feel safe in.
Just because you have a low credit score it does not mean that you have to suffer when it comes to renting an apartment. It may take a little extra effort to work around that detrimental score but it is possible to do.
Lean on your income, show off your savings, or pay a little bit more up front and you may be able to land the apartment that you want. Have clear communication with your landlord and you never know what may happen.
The important thing is to not give up if you have been rejected for an apartment because of your credit score. Keep trying and you might find a landlord that is willing to work with you and your unique situation.
Ready to take your Credit to the
Ready to take your Credit to the