Tips on Getting Approved for a Lease or 'Qualifying'
January 20, 2023
GETTING APPROVED FOR A LEASE OR ‘QUALIFYING’
Landlords, rental property owners, and apartment complexes use something called ‘qualifying’ to decide who they will rent to. The process includes looking at key factors that indicate whether you will be a good renter, pay your rent on time, and take care of their property while you are renting. Apartment ownership and landlords typically look at the following factors:
The majority of apartment complexes will require you to make at least 2.5x to 3x the rent amount in verifiable monthly income. For example, $1000 RENT NEEDS BETWEEN $2500 (2.5x) & $3000 (3x) in verifiable monthly income.
To verify your income, an apartment complex will typically request six months to one year of employment history in the form of paystubs, bank statements, or a letter of employment and compensation from your employer. IMPORTANT NOTE: They will likely be looking at your pay before taxes are taken out (your ‘Gross Income’).
If you’re self-employed or a 1099 contract worker, producing some of the documents can be difficult.
If you're self-employed or are starting a new business, apartment complexes may want to see proof of your income in the form of tax returns or bank statements. Landlords also want to know that there's enough money coming in each month to cover rent payments, security deposits and other expenses associated with renting.
Apartment complexes will want to verify your credit score using one of the major credit agencies: Experian, TransUnion or Equifax. Apartments vary widely in what their minimum required credit score is, but in general the higher the better. The break-down looks like this:
Below 550 – Bad
550 to 649 – Poor
650 to 699 – Fair
700 to 749 – Good
750 & Above – Excellent
Your credit score is meant to be a representation of your likelihood to pay your debts on time and in full. This calculation includes:
- YOUR CREDIT LIMIT: The total amount of money available to you in credit lines or credit cards. The more credit extended to you the better. Even if you don’t plan to use a card or credit line anymore, as long as you aren’t paying any fees on that credit if there is a 0 balance, keep it open to increase your credit score.
- YOUR CREDIT USE Percentage: This refers to how much of your credit limit is currently outstanding. As a simple example, if you have $3000.00 available to you on a credit card and your balance is $1500.00, then you are using 50% of your credit. In terms of credit scores, the lower your credit use percentage, the better your credit score.
- YOUR PAYMENT HISTORY: Have you made your payments on time and in full to credit cards, landlords, and other credit agencies? This one is very important. Late payments, payments that don’t meet the minimum, or being delinquent on payments (not making them at all) can dramatically hurt your credit score.
While it can be The best way to build your credit and achieve a high credit score is to use your credit cards responsibly and pay them off each month if possible. This will keep your credit use percentage low, and you will avoid paying lots of interest while still showing prospective landlords and creditors that when you borrow money, you pay it back on time and in full!
Don’t have any credit history? You may need a cosigner.
Apartment Complexes will review your rental history. They are looking to confirm:
- You don’t owe money to any properties for unpaid rent, excessive damage, etc.
- The rent was paid on time and in full.
- You gave proper notice to move out.
- There were no issues with your lease.
- You left the property in the same condition you received it in.
The properties will do this by checking your credit and often by asking for previous addresses, so they can contact those properties to confirm you're in good standing.
First-time renter? You may need a cosigner and references.
When applying for an apartment, you often have to consent to a criminal background check. During this process, the apartment complex will evaluate your public record to determine if you are a threat to other residents or neighbors. Most apartments will not lease you if you have a public record within the last 10 years, but some will work specific levels of public record or instances where the record dates back many years. Each apartment complex’s policy on what they will or will not accept is different and changes frequently. If you need assistance renting with a public record, please give us a call and we can consult on your specific situation.