What’s The Minimum Credit Score Needed to Rent A Home?

Did you know that 44.1 million households rent their home? That’s just over 35% of all households renting. But sometimes, it feels like the tenancy application process can be as stringent as applying for a mortgage. 

However, no precise minimum credit score is needed to rent a home. Instead, your credit history is a general indicator of your reliability. If you have a low or no credit score, you may find it challenging to rent. 

 

How are credit scores determined?

Your credit score is a number that considers five different factors. Understanding how each aspect affects your score can help you boost your credit. 

 

  • Payment history, 35%: Consistent on-time bill repayments will keep your score healthy. Late or missed bills might damage your score.
  • Credit utilization and loan balances, 30%: Taking on debts and loans can impact your score, but it can improve on-time repayments. Credit utilization refers to how your debt is balanced. For example, a maxed-out credit card will hurt your score. 
  • Length of credit history, 15%: The longer you make on-time repayments, you are more reliable.
  • New credit, 10%: Taking out a new credit card or a loan will cause your score to dip in the short term. 
  • Credit mix, 10%: Ideally, you want a range of different types of credit. 

 

Why do you need a good credit score?

A landlord’s income relies on the tenant paying their rent on time. If the tenant stops paying, the landlord cannot meet their home loan repayments or conduct general maintenance. It could put them in a difficult situation. Strong credit scores suggest you are reliable when making on-time repayments. Someone with a low or no credit score is riskier for the landlord.

Some landlords offer no-credit rental properties. While these might seem attractive for renters with bad credit, the properties are typically not looked after or pleasant to live in. Your landlord might not conduct routine maintenance, such as unblocking drains.

 

What else do landlords look for in future tenants?

While landlords value your creditworthiness, it’s not the be-all and end-all of renting a property. They also want to see that you’re a good tenant. Suppose you have a history of renting without issues (e.g., always get your deposit back in total) and can provide strong references. In that case, a landlord might be more amenable to a lower credit score applicant. 

Moreover, if you can show evidence of a stable income in other ways, a landlord might overlook your credit history and move forward to drawing up a tenancy agreement. Include payslips and bank statements in your tenancy application. 

 

How to determine if your credit is strong enough

It’s best to find out your credit score before trying to rent a place to live. Therefore, you can take the necessary steps to improve it or find alternative means of proving your financial stability and reliability. You can find your credit score for free online. Look for any red flags, such as late payments that may affect your tenancy application.

 

What’s the minimum credit score to rent?

It depends on the landlord, the location, and the quality of the rental property. While there is no minimum credit score to rent a house, you should aim for somewhere above 600. If you’re seeking to rent in a high-demand area, you might need a score over 700.

You might find more sympathetic landlords with rental apartments than houses if you have a low credit score. According to Experian, the average credit score of apartment renters was 638. However, as with houses, there is no exact minimum.

 

How to improve your credit score?

There are many ways to improve your credit score. Here are our tips:

 

  • Make on-time bill payments.
  • Pay off any overdue payments.
  • Consider taking out a credit card.
  • Utilize your credit across different accounts.
  • Do nothing — red flags eventually disappear from your credit report.

 

What should you do if you have bad credit?

If you have a poor credit score, consider how you might improve it. Moreover, make sure you’re upfront with your prospective landlord. They will find you more trustworthy if you’re transparent about your situation rather than if they find out when they conduct a credit check.