If you are looking to rent an apartment in New York and have bad credit, using a guarantor is the most common way to get approved for an apartment. And in your case, you might have more leverage with certain landlords because of your income.
A personal guarantor is a family member or close friend who agrees to pay your rent in the event of default. In NYC, a guarantor must have good credit and earn at least 80 times your monthly rent in annual income. You can also pay a guarantor (more on that in a moment).
What credit score do I need to rent an apartment?
Credit scores vary by landlord and building, but a score of 675 or lower can set off red flags, says Eric Shostak, agent at Corcoran.
Marc Weber, wealth manager at Weber Property Management, says they require a credit score of 700 or higher for all applicants.
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Weber says priority is given to tenants with a good credit score compared to someone earning 40 times the monthly rent “because people with higher salaries aren’t always the ones paying and they may have bad payment histories,” Weber says. The idea is that they make smart financial decisions. “People with great credit want to keep a high score and won’t do anything to hurt it.”
How can I rent if I have bad credit?
The first step is to put together a solid application. Most landlords are willing to work with you, especially if you can prove that you earn enough money to qualify for the apartment, Shostak said. Showing that you have a significant amount of money in your savings can also help.
Weber says applicants with bad credit would be required to have a guarantor. If you do not have a personal guarantor, you can use a third-party institutional guarantor if the lessor agrees. These companies have their own requirements for income and credit scores, but can be more flexible.
If you can’t use a personal or institutional guarantor, you might be lucky in a building with lots of vacant apartments. A landlord with apartments to fill might be willing to ignore bad credit if you earn enough income.
You can also check out smaller landlords, as some may be more flexible. However, Shostak says some homeowners who live in the building are picky because they want to make sure they have a qualified tenant sharing their roof.
Another trick is to present a letter of reference from a previous landlord explaining that you are a good tenant with a solid payment history.
Time is also on your side: winter is a slow time for the rental market and landlords are more flexible. Another way to take a break is to offer pay higher rent (if you can swing it) to circumvent your credit situation. Keep in mind that the landlord will want to qualify your income for that higher rent and be prepared to follow through. Shostak says he’s seen many tenants offer to pay higher rent to get approved, but it turns out they’re not earning enough.
One final tip: some landlords used to accept several months’ rent upfront or an additional security deposit as a workaround for tenants with bad credit, but this is now illegal after the Rent reform 2019.