There are a number of criteria you need to meet when applying to rent an apartment. One of the most controversial ones is credit score. It is understandable that people look to credit score as a gauge of how good a person is at paying their bills. But it also tends to keep people who have struggled in the past from getting ahead.
Regardless of how you feel about it, the simple reality is that many great apartments will be off-limits to you if you don’t have a good credit score. This is especially true in big cities, where rent is more expensive and apartments are in high demand.
This is not the only thing for which your credit score makes a difference when renting. Your ability to rent furniture and buy appliances on credit may require a good rating. Fortunately, since you can find renters insurance starting from only $5/month, you should manage to get coverage even with a relatively low credit score. However, all of this is contingent on securing an apartment in the first place.
Let’s take a look at what credit score you may need to rent an apartment in a big city.
What is a good credit score?
If you’re not familiar with what counts as a good credit score, it is worthwhile taking a quick refresher. Considering that most landlords use FICO credit scores, we’ll detail the categories according to their system. These categories are:
- Exceptional: 800 to 850
- Very Good: 740 to 799
- Good: 670 to 739
- Fair: 580 to 669
- Poor: 300 to 579
Of course, landlords will prefer that your credit score is as high as possible. But since the average US resident’s credit score was 638 in 2020, most are willing to rent out their apartments to applicants with ‘Fair’ credit scores.
This, at least, is the case in most markets. A 2017 report from RentCafe showed that the average credit score of approved applicants was 650. People with credit scores below 580 were far likelier to get rejected.
But what about in big cities with competitive markets?
What credit score do I need in NYC or SF?
Let’s look at two of the most expensive cities in the US. These are two cities where rent is sky-high and competition for apartments is intense. In these cities, your credit score needs to be higher to secure a good apartment.
In San Francisco, the average credit score for approved applicants in 2020 was 719, which was the highest in the country. In NYC, the average credit score was only slightly lower at 715.
In other words, to secure an apartment in these cities, you need a credit score that is in the upper range of the ‘Good’ category.
What does this mean for people with low credit scores who want to rent in a big city? Should you give up on a good apartment?
How does context count?
The good news is that a less-than-ideal credit score does not guarantee that you will be rejected. Since it is generally the landlord who approves or rejects you, and not an automated system, you can explain your context to them. So, if you were struggling on minimum wages a couple of years ago but are now a high earner, bank statements or payslips could prove to the landlord that your poor credit is a thing of the past.
Furthermore, landlords will analyze your credit report and won’t just look at the score. They’ll look for red flags like late payments and many unpaid debts. Factors that are less likely to affect your ability to pay them will not be considered all that important.
If you do not have context to explain away your poor credit score, you can still apply for apartments in desired areas. However, you may need to take extra measures. For example, you could offer to pay an extra month upfront or bring on a cosigner. If you have stellar references from past landlords, you will also stand a better chance.
Alternatively, you just might have to look for cheaper apartments. By proving that you earn 3 or 4 times the monthly rent, you may be able to secure the apartment.