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The nitty-gritty of credit scores

For the most part, renting an apartment begins with an application process. Not only do you need to disclose your current income, but you also have to provide personal information such as your social insurance number (SIN). Your SIN is used to access your credit score.

Your credit score comes into play whenever you’re making large financial commitments, such as buying a car, applying for a loan or renting an apartment. For the latter, the property manager and landlord want to make sure that you can handle the monthly rent and that you don’t carry a lot of bad debt that would impede your ability to pay.

If you’re worried that your low credit score will reflect badly on your rental applications, consider doing what you can to improve your financial situation before applying. It’s important to note that you cannot fix your credit score overnight. You need to be consistent over a period of time for it to reflect positively.

Pay down credit cards (and bad debt)

While using credit cards is the easiest way to build credit, it can be the single cause of destroying it, too. It’s all about how you use credit that determines whether it’s an asset or a curse. First of all, use credit only if you can handle the debt load. This means use credit only if you can realistically pay your minimum balance (or more) down each month. If you can keep up with your monthly payments and aren’t relying on credit to live, you should be able to balance it.

If you are using credit you cannot realistically pay back and are defaulting on your payments, credit is not working in your favour. If this is the case for you, you need to take steps towards improving your situation before it gets worse.

To do this you might need to get a part-time job to help pay the bills, or talk to a financial adviser or credit councilor to get back on track through a debt repayment plan.

Get a roommate or co-signer

If you’re worried that your credit score will cause your rental application to be ultimately rejected, consider applying with a roommate or co-signer. By agreeing to split the rent (or having a backup), you are lowering your monthly expenses. This will increase your chances of getting the apartment, as you are no longer a risk in the eyes of the rental company or property manager.

Plead your case

On paper you may have bad credit, but we all know there’s more to the story than that. Having a low credit score doesn’t automatically mean you are bad with money. When applying, disclose that you have poor credit and explain your situation. Did you lose your job? Did something happen in your life that caused a significant financial setback? By laying it out on the line, you are telling the landlord that you assume responsibility for it, but that you are working hard to improve. If you are working with a debt management company or financial adviser, ask them to provide proof of the steps you are taking to get back on track. This might be a Hail Mary move, but when it comes to securing housing, you need to try.

You can also ask your employer and previous landlords for reference letters proving you are a reliable person.

Looking for a new rental apartment in your price range? Search rental properties in your area using Monthly rents are displayed with each listing, and information on other costs, such as water and electricity, are included as well. Check your credit score using Equifax or TransUnion to see where you stand. Good luck!