You Need This Credit Score to Rent an Apartment in Los Angeles, CA
Renting an apartment in SoCal is not easy but it’s doable. Credit score requirements to rent an apartment unit change every year. The nicer and more expensive the apartment is the higher the credit score required.
Experts suggest that when renting an apartment is not always about budgeting and the area. You need to know your credit score also known as the FICO score. FICO scores are a simple way a landlord will know if you’re creditworthy or a risk based on your previous financial history. Why is it so impartment for a landlord to know your score if it’s only an apartment?
Because it details your history of paying off debt on time. The landlord will use this to see how likely you will pay your rent on time. That means in the landlord’s eyes those 3 digits will determine if you will get approved or not.
How Do Credit Scores Work?
Credit scores are easy to figure out. A credit score is broken down into three categories; poor, fair, and excellent. These three categories will determine if you will get approved for a credit card, home loan, and car loan.
Credit scores range from 300 (poor credit) to 850 (excellent credit). A credit score of 300 to 650 is usually poor, 651 to 699 is fair and 700 and up is considered excellent starting in 2021. Due to the COVID-19 pandemic credit scores have changed.
How Do I Check My Credit Score?
There are three major reporting sources, Equifax, Transunion, and Experian. Free apps like Credit Karma offer free credit checks without any hidden fees or strings attached.
Checking your credit is called a soft inquiry, which won’t affect your score in a negative way. Therefore, check it as often as you like. On the other hand, a hard inquiry is when you apply for a line of credit. A potential lender reviews your credit information, which may hurt your score.
“It’s 2021 so keeping up with your credit score and knowing what you need to work on is key. Many people think a poor score will go away on its own but in reality, it won’t.” says, Francisco Torres a financial advisor from Money-tree LLC in Los Angeles, CA.
The most common way of hard inquiries is often done when someone tries to apply for a credit card at department stores or electronic stores. Stores will lure in young people or the elderly with offers like ‘no fees for x amount of time’ but in the end, they end up paying more.
What is the Lowest Credit Score Needed to Rent an Apartment?
In a perfect world, landlords will only rent to renters with excellent credit but that’s always the case. Anyone with a credit score of 600 and below will have a hard time getting approved. People with lower credit scores will likely have a high-security deposit and will have to pay 2-3 months to rent upfront.
If we do the math for an apartment that’s $1,500 a month a person will a low credit score will have to pay $1,500 + $3,000 (security deposit) + 2 months rent upfront of another $3,000, which will equal out to $7,000. For the average working family, $7,000 is a lot of money.
What to do if You Have Poor Credit to Avoid High-Security Deposit?
Having a low credit score isn’t the end of the world; actually, it’s pretty common for many college students with student loans to have poor credit. The goal is to work on it to make it better.
Local Records Office suggests that the best way to avoid ridiculous security deposits is to have a co-signer; this will help the landlord to feel more secure. Providing proof of a steady job and pay stubs to prove you meet the landlord’s income requirements will help you avoid rejection.
“Making your landlord and property management company feel secure is the best way to avoid high fee and rejection.” adds, Torres.
Can I Rent an Apartment Without Rental History?
Renting an apartment without a credit history is not a death sentence. Having a good credit score is important as having a rental history. Renting an apartment without rental history is not the end of the word. We all start somewhere so renting a small apartment first is the right way to go.
Not only will a smart affordable apartment help you understand how to keep an apartment and pay for it every month. This will work but it will help you have a rental history.