When looking for an apartment, the worst thing you can have in your credit history is an unpaid bill from a previous apartment. Owing on a previous apartment doesn't preclude you from renting a new one. However, delinquent rent probably reduces your options for a new place, or you may have to pay more for an apartment.
Nothing stops a landlord from renting to you under any circumstance, even when you owe money on a previous apartment. For practical reasons, a landlord probably wouldn't rent to you with a delinquent lease on your credit history, because you may break your new lease, too. Landlords often require at least an average credit rating — about a 620 — and no broken leases; the ideal applicant should have a rating of at least 670.
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Not all landlords require a credit check. Owners of large apartment complexes usually run a credit check on applicants, but landlords of smaller complexes may not run a credit check due to the cost. Mom-and-pop complexes may allow more flexibility as far as their credit rating requirements. You may have a chance to explain the delinquent rent, such as a period of unemployment causing you to miss rent and that you paid off what you owe to your previous landlord.
Paying Off a Broken Lease
Landlords usually don't report to the credit reporting agencies, so delinquent rent probably appears on your credit history because your previous landlord sued you in small-claims court or sold the debt to a collection agency. Talk to your previous landlord about settling the debt or paying it off in installments. A paid collection or judgment doesn't improve your credit rating, but it usually looks better than ignoring the debt.
Start repairing your credit history before you look for a new apartment. Bankruptcies and frequent late payments are red flags to a landlord, so make it a priority to pay bills on time. You may have to offer the landlord a larger security deposit than that required from a normal tenant, as well as let the landlord deduct rent directly from your bank account. You may also offer to prepay several months of rent or the entire lease.
- Bankrate.com; Specialty Consumer Reports Reveal Your Secrets; Amy Buttell Crane; August 2005
- CNN; Rent Payments Now Appear on Experian Credit Reports; Blake Ellis; February 2011
- "Los Angeles Times"; Renting an Apartment With Bad Credit Isn't Easy; Liz Weston; October 2010
- Experian; Eviction Will Remain on Your Report After Paying Collection or Judgment; Maxine Sweet; March 2011
- Mainstreet; 3 Tips to Rent an Apartment With Bad Credit; Brian O'Connell; September 2010