If you have a limited credit history or negative marks on your credit report, you may have trouble qualifying for a lease. Still, landing an apartment you love isn’t impossible, even with bad credit. There are a few things you can do to prepare for your credit check and make your application more attractive to a landlord.

What is a credit check?

A credit check happens when your credit reports are reviewed in order to evaluate your financial situation and creditworthiness. Credit checks result in either a hard or soft inquiry on your reports. Hard inquiries typically occur when you apply for a loan or credit card. They can stay on your credit reports for up to two years and cause your credit scores to drop temporarily.

Soft inquiries, on the other hand, don’t hurt your credit scores. They happen when you check your own credit reports or when a potential employer or insurance company looks at them. You may also see a soft inquiry on your reports if a company pulls it for promotional purposes, such as sending you a preapproved credit card in the mail. Soft inquiries only show up on the version of your report that you receive when you check your credit — no one else can see them.

Depending on how the landlord performs the credit check, it may result in a hard or soft inquiry on your credit reports. If you’re concerned about your scores dropping from multiple rental credit checks, landlords may allow you to pull your credit reports yourself and give them a copy.

The good, the bad and the no credit

What landlords will see on your credit reports depends on how well you’ve managed your money over the past few years. If you’ve paid your bills on time and kept your debt at a manageable level, you’ll probably have a positive credit history and good credit scores. But if you’ve missed payments or taken on too much debt, you may have damaged your credit scores enough to end up in the “fair” or “poor” range.

Payment history is the biggest factor that impacts your FICO credit score, followed by the amount of debt you owe and the length of your credit history. The mix of accounts that you have and the number of accounts you’ve opened recently can also have an effect on your scores.

Making late payments and shouldering too much debt compared to your income and available credit can cause your scores to fall. Your credit scores can also drop if you open up too many new accounts in a short span of time.

Having too much credit can hurt you, but so can having too little. People who don’t have active accounts or long enough credit histories won’t have good scores. If you don’t have a few different types of accounts, such as student loans and credit cards, then that may negatively affect your scores as well.

Renters who have a strong history of paying bills on time and using different types of credit responsibly won’t have trouble getting an apartment. But renters with bad credit or no credit may face roadblocks during the rental application process. So if you have poor credit or a thin credit file, you may want to work on improving your scores.

It’s usually easier to build your credit for the first time than to rebuild it after making financial mistakes. But by adopting good credit habits, renters in either situation can boost their scores and chances of landing an apartment.

What landlords look for and why credit checks are part of the picture

Landlords look for renters who are likely to pay their bills on time. Eviction is a lengthy and costly process for landlords, so they don’t want to end up with a renter who defaults on the lease, and thus, has poor credit scores.

Landlords screen applicants by looking at a variety of documents, including credit reports, public records, pay stubs, tax returns and bank statements. On your credit report, they check for potential signs of financial instability like late payments and high debt levels. They may also look at public records to see if you’ve ever been evicted or have tax liens or court judgments against you.

To verify that you have enough income to afford rent, landlords will need to see financial documents like your pay stubs and tax returns. They may also run a criminal background check and ask you to provide personal references that vouch for your character.

If you have bad credit or other financial difficulties that may make it difficult to qualify for an apartment, don’t panic. Some landlords are willing to work with renters who have below-average credit, especially if they have a cosigner or are willing to pay more money upfront.

How to prepare for a credit check before completing a rental application

Here are some things you can do before you complete your rental application to increase your chances of approval.

  • Check your credit reports. Review for errors or outdated information that may bring your credit score down.
  • Find a cosigner if your credit is bad. If you have poor credit or limited credit history, ask close friends or family with good credit and consistent income to consider cosigning your lease.
  • Gather references if necessary. Ask old employers, landlords or anyone else who may be able to vouch for your financial responsibility to write you a reference letter.
  • Consider paying more upfront. Offering to make a bigger deposit or prepay a few months of rent can increase your chances of getting approved.

Because most landlords perform credit checks, qualifying for an apartment may be more difficult if you have bad credit or no credit history. But explaining your situation to your potential landlord and proving that you’re financially responsible through other means can go a long way. If you face your bad credit head-on and find ways to compensate for it, you’ll be in your new apartment in no time.