How to rent with bad credit

Question: We are relocating from Miami because of a job offer in the city but don’t have good credit or guarantor, are there any possibilities to find a place?

Answer: I have had this question asked more than any other. There is no yes/no answer, it is very individually based. I will say that I have heard landlords in general becoming more lenient in terms of what “good credit” really is to them because of the high vacancy rates and economic hard times. I will go through a few scenarios for the general public and possible options. The first scenario matches the question of the person above directly.

Bad Credit Scenario 1:

You have a great work history, make 40-50 times the rent, and don’t have great credit or a guarantor.

You will most likely be able to find an apartment though your search but it may be a bit more difficult for you. This is a situation where employing a broker is very helpful and worth the fee. It is the broker’s job to take you to the landlords they know from experience are more lenient. I knew of a few key landlords I would always bring my clients to when they had questionable credit.

In this scenario you can’t be as selective and you might have to compromise on location and price. It is standard practice that when your credit is not great, a landlord will ask you to put up an additional month’s rent on top of the security and the deposit. I have worked with a few landlords who asked my clients to put up six month’s rent because of shaky credit. This depends on your specific situation. I recommend running your credit report to see your exact score before looking so you know where you stand.

If you want to avoid the broker’s fee because you know of an apartment you want that is no-fee, don’t be shy. Call the landlord or go to their office and introduce yourself and explain your situation. You have poor credit because of a Gap credit card from college but landlords are people too and may understand. Finding an apartment is all about being proactive.

Bad Credit Scenario 2:

You have zero work history, you are a new hire, you make 25-30 times the rent, you do not have a guarantor, BUT you have great credit.

A year ago, I would have suggested finding a roommate that is more established and or has a guarantor and look for housing lotteries. If you build your work history up, after a year you will be able too look at wider variety of places to live. Another option is pushing for you to ask your dear Aunt Sally to act as your guarantor. But, as of 2008 there is a new option for new hires called Insurent. (www.Insurent.com) Insurent is a new company that acts as a guarantor for people who have a solid, not necessarily perfect, credit history and who make a solid income by national standards. Since Insurent works directly with the landlords, there is no broker’s fee if you register through them. They do charge a fee, but it is significantly less than the broker’s standard of 15% of a year’s rent.

From Insurent’s website: “Rather than being a guarantor, the Insurent Lease Guaranty Program, accepted by major landlords in the NYC Metropolitan area, can act as a guarantor for the apartment lease. Many parents who could financially qualify as guarantors may opt to utilize the Insurent Guaranty Program and pay the fee for their son or daughter rather than subjecting themselves to the burdensome and invasive process of providing two years of tax returns, net worth statements, brokerage reports and bank statements required by landlords. Insurent can qualify the renter in less than two hours after filling out the online application. The renter typically pays a fee equal to 78% of one month’s rent.”

Bad Credit Scenario 3:

You have poor credit, you have no guarantor, and you have low-paying job.

Not all hope is lost! Many people come to New York with big dreams and big debt. This is where tools such as www.craigslist.com and www.backpage.com are helpful. You will probably need to find a sublet or someone looking for a roommate. I have found the best deals for friends and family through these types of sites. Roommates are far easier on your situation than their landlord would be. Many have lived in the city for over a year, so they are locked in at rent rates that are better than market price. Prospective roommates will want to interview you and see that you have a savings account and can easily cover rent. If you do not want a roommate and you want to live on your own then a sublet is your best shot. However, if you have a low paying job, finding an affordable studio will prove to be difficult. This goes for all the boroughs.

The bottom line is that anyone can live in New York City if they are willing to compromise. There are a thousand different scenarios to play out, but I can tell you if you are determined and are willing to take the time you will find a place that will meet your needs.

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