Can I get a NYC apartment with a Bad Credit Score?
Getting an apartment in NYC is not easy. You have to meet certain requirements before applying and some of them can be quite strict. For instance, you may need up to 6 documents to rent in NYC (but not all landlords may require all 6. Some just need to see a subset of them). However, virtually all landlords perform credit checks on applicants. So obviously, it can be really frustrating if you have a bad credit score.
Does this mean you are doomed? Not necessarily.
NOTE: To search for NYC apartments go to frele.com (free service). Or, click for more rental tips
How to get a NYC Apartment with Bad Credit
Unfortunately, having bad credit does eliminate a lot of possible apartments. Some NYC landlords simply won’t accept renters with bad credit. However, many landlords are willing to accept your application in spite of your bad credit history. As long as you do one of the following, you still should be able to get a NYC apartment despite a bad credit score.
Note: Some landlords may require a combination of two or more of the following requirements.
Option #1: Get a guarantor to offset bad credit
A guarantor is a person (ideally someone with good credit) who will “guarantee” the rent. Usually, it is a parent or relative. (See our blog post about guarantors). But a friend or friend’s relative can also stand in as the guarantor and co-sign your lease. If you miss rent, your guarantor will be liable to pay it instead.
Note that landlords will generally ask guarantors for the same documents required from NYC renters. Most require guarantors to earn 80 times the monthly rent. If you are trying to qualify by getting a guarantor for your apartment, make sure you understand the landlord’s requirements first.
Option #2: Pay extra security deposit to offset bad credit
Throughout a lease term, the landlord will hold on to your security deposit. It’s one of the upfront costs you have to pay before signing the lease. As the term implies, a landlord uses this money as “security”. In case there are damages to the rented property or the tenant skips on rent, the security deposit can be used to cover those expenses.
Under normal circumstances, the landlord requires a month’s worth of rent as a security deposit. So if you’re getting a $2,000 apartment, you need $2,000 for a security deposit. However, this only applies to renters with good credit and good overall qualifications.
If you have a bad credit score, you may need to come up with more than two months of extra security depending on how bad your credit is. Believe it or not, some landlords will ask for 4 to 6 months of security since it usually takes this long to evict someone from an apartment. This amount of extra security gives the landlord enough money to collect rent from you while they are trying to evict you, the thinking goes.
Option #3: Pay the entire year upfront to offset bad credit (but won’t always work)
It sounds like a good way to satisfy landlords nervous about your bad credit score, right? After all, what’s the risk to the landlord if you pay rent for a whole year upfront, right? And yes, there will be landlords who are willing to accept this kind of arrangement.
However, the savviest landlords won’t give you this option. They are would rather have an ongoing monthly relationship with you so they can best evaluate your tenancy. Are you paying your rent? Are you paying on time?
Another main reason why landlords will often NOT give you the option to pay the whole year upfront has to do with the end of the lease term. If you have bad credit you may not have a good history of paying your bills. Therefore, even if you pay the year upfront the landlords are concerned what happens toward the end of the lease. In month 11 for example, the landlord won’t have any security from you. What if you just stayed in the apartment for the next 4 months and did not pay your rent? This is what the landlords are worried about.
Option #4: Get references to offset a bad credit score
Another way to help make up for a bad credit score is to get landlord references. Have previous landlords put in a good word about you. Sometimes a well written personal “landlord reference letter” can go a long way. If you have a good employment history, employers can give landlords the assurance they need that you’ll be paying rent on time. You should also consider enlisting the help of a broker who can connect you with more lenient landlords.
For more NYC rental tips, please go to frele.com/learn.
This article was written by:
Phil Horigan, NYC Real Estate Veteran
Founder, Frēlē, the free and honest NYC rental marketplace
Producer, Phil’s NYC Rental Tips [YouTube Channel]
Blogger: flowfreely.com
Instagram: @philiphorigan
Phil has been a licensed NYC real estate agent since 2004 working for some of the top real estate brokerage firms in the industry. He founded Leasebreak.com in 2013, and Frēlē in 2017. Frēlē and Leasebreak are free and transparent rental marketplaces to search for or post apartments for rent in NYC
Go to frele.com to search for NYC apartments (free service).