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Getting an apartment when you don't have a credit history can be tricky. But remember: No credit isn't the same as bad credit. Here are some ideas for convincing your new landlord that you are worth the risk.

Renting an apartment can be harder than you think, especially if you are a recent college graduate and have no credit or no rental history.

Don’t worry: As long as you’re prepared, you should be able to find a great place to live (with only minimal hassle).

Just follow these guidelines:

Rent from an individual owner, not an apartment complex

When you complete an application for a rental in an apartment complex or from a management company, it’s highly likely that they will have an established set of tenant guidelines. If your credit or rental history isn’t established enough, chances are you won’t get approved.

Not sure about your credit history? Check it for free here.

You can get around this hurdle by avoiding apartment complexes and management companies altogether and instead rent from individual property owners. Individuals might have their own standards, but they will most likely be more lenient than the larger companies. You might even convince a landlord to rent to you based on a personal connection (e.g. they might just “have a good feeling” about you).

Emphasize the obvious—you have no credit because you have no debt

You can use your lack of credit history to your advantage: Stress to a prospective landlord that you have no credit because you have no debt.

That means that you have no debt obligations and therefore no monthly debt payments. Fewer monthly payments can mean more cash on hand to pay rent.

Lack of credit history is not nearly the same thing as having bad credit.

Be prepared to thoroughly document your income

Though credit is a big part of qualifying for a rental, your income will have at least equal weight. Volunteer to supply recent pay stubs, a W-2, and even a letter from your employer to help sway a nervous landlord.

If the monthly rent on the apartment or the home is no more than 25% to 30% of your monthly employment income, the landlord may be happy to rent the home to you despite your lack of credit history. After all, you will have met the single most important qualification—that you can actually afford to make the monthly rent payment.

That’s actually what every landlord is looking for, and it might even convince an apartment complex or management company that you are worth renting to.

Make a larger security deposit

This can get expensive, but if you have the cash it can be an excellent way to work around a lack of credit history. Money talks!

As an example, let’s say that your landlord requires a one month security deposit. You can offer to provide three months’ in lieu of a credit history. You can set the security deposit up any way that you like. For example, you can include language in the lease that has the extra two months’ deposit applied to the last two months’ rent on the lease.

After paying the first 10 months of the lease faithfully, the landlord may feel comfortable in applying the extra security deposit toward the monthly rent.

Get a roommate

If you are single, you may be able to get around your lack of credit history by bringing in a roommate. Naturally, that roommate will have to have sufficient income—and a strong credit history—to overcome your lack of credit.

Add a co-signer

If you’ve found the perfect apartment but it’s in a complex or controlled by a management company, you may still be able to get that lease.

If you can find a cosigner with a strong income and credit profile, adding that person to the lease should help overcome your lack of credit. A parent, relative, or friend can sign the lease along with you, essentially guaranteeing that if you can’t make a rent payment, they will.

The only danger is that if you miss a month’s payment—or even if you just forget and pay late—this could damage your cosigner’s credit score (and possibly your relationship).

Summary

If you have no credit or rental history, consider the following:

  • Rent from an individual, not a company
  • Emphasize that no credit is better than bad credit
  • Prove your trustworthiness with employment documentation
  • If you have the cash, make a larger security deposit
  • Get a roommate with good credit
  • Add a cosigner to your lease

Using any one of these strategies, or even a combination of two or more, should enable you to get the apartment that you’re looking for. Good luck!

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About the author

Kevin Mercadante
Total Articles: 144
Since 2009, Kevin Mercadante has been sharing his journey from a washed-up mortgage loan officer emerging from the Financial Meltdown as a contract/self-employed “slash worker” – accountant/blogger/freelance web content writer – on Out of Your Rut.com. He offers career strategies, from dealing with under-employment to transitioning into self-employment, and provides “Alt-retirement strategies” for the vast majority who won’t retire to the beach as millionaires. He also frequently discusses the big-picture trends that are putting the squeeze on the bottom 90%, offering work-arounds and expense cutting tips to help readers carve out more money to save in their budgets – a.k.a., breaking the “savings barrier” and transitioning from debtor to saver. He’s a regular contributor/staff writer for as many as a dozen financial blogs and websites, including Money Under 30, Investor Junkie and The Dough Roller.
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