Tips for Renting with Bad Credit - SF
July 8, 2010 5:37 PM   Subscribe

I have bad credit and I'm looking to rent an apartment in San Francisco. I tried to get a place early last month before I arrived and had a bad experience (very judgy and insulting leasing company) over my credit. Now I'm feeling really nervous. Any suggestions to help me feel confident going into apartment viewings?

A little background: I lost my job about 3 years ago (large scale layoff) and was unemployed for about 4 months. At that point in my life I was just out of college, had a lot of revolving debt from school (student loans and credit, car lease, etc) and was not prepared to pay my bills when I got laid off. I now have a great job and was just relocated to SF due to a promotion, which came with a very respectable raise.

During my unemployment, I had a number of late payments and, being young and dumb, let a couple of bills go to collections. I have paid off one, the other I settled on and have been struggling to get my credit report accurately updated with. The rest of my accounts are up to date for well over a year. I also had the lovely experience of a couple of credit card companies closing my account after I paid my balance off and a second lowering my credit after I made a big payment, which has not helped my score. Despite over 2 years of working my tush off, even moving in with mom for a year, to turn my finances around, my credit score is hovering in the high 500s.

LONG STORY SHORT - I'm finding most places here are very stringent on credit. What can I do to show I'm an appealing tenant despite my credit? I have a good income and good rental history. I'm quiet, nice and pay on time. If I had good credit I'm sure I'd be the ideal applicant. Any tips on how I can win them over?
posted by amycup to Home & Garden (17 answers total) 8 users marked this as a favorite
Can you offer to pay 6 months in advance? Alternatively, can your mom or someone else cosign the lease?
posted by Wordwoman at 5:41 PM on July 8, 2010

Can you offer a deposit larger than what they're asking for? Individual landlords may also be more willing to work with you than leasing companies are.
posted by corey flood at 5:42 PM on July 8, 2010

I have had to deal with this in the past. I found that I had the most success renting from homeowners. So privately rented apartments and housing. With these people as landlords, I was usually able to explain any credit situation I had at the time.
posted by ShootTheMoon at 5:42 PM on July 8, 2010

Response by poster: My mother can cosign and has great credit. I offered this with the previous location and we did get as far as getting into the leasing process which fell through for a number of reasons - basically amounting to he wasn't comfortable renting to me.

I wish I could offer 6 months in advance, but I don't have that much to offer upfront in this market.
posted by amycup at 5:48 PM on July 8, 2010

Hey, we've got the same problem in Sydney. A housing shortage combined with subsidies to people investing in property means fascist real estate agents, terrible conditions and forty applicants for every flat. I feel your pain.

It's common here for people who have no tenancy history to be asked to pay some weeks' rent upfront. Could you acknowledge your debt and offer to pay (say) three months' rent in advance, as a gesture of good faith?

I don't know about your debt, but I've found real estate agents to be superficial enough that if I shave and wear a suit and a tie to a viewing, as if I've just come from work, the property managers are more pleasant. Bring business cards, if you have them. Remember the respectable size of your pay. Money's a wonderful thing for confidence.

Oh, and make a point of walking out of any properties you wouldn't live in. ("Dirt floor kitchen? $350 a week? You're kidding") The look on agents' faces when you turn your nose up at them is a wonderful thing.
posted by Fiasco da Gama at 5:50 PM on July 8, 2010 [2 favorites]

If you can avoid it, don't have Mom co-sign for you. You're an adult and, should something go wrong, you'll feel terrible if Mom has to start ponying up your rent (or, maybe not, YMMV).

ShootTheMoon's idea is a good one: find small landlords and pitch your story to them - let them know upfront (when you go to look at the place and are interested) that you have 'bad' credit. Most will be willing to work with you. Same with smaller property landlords.
posted by LOLAttorney2009 at 6:07 PM on July 8, 2010 [1 favorite]

This was me about six years ago. Here is what I did:

-Make a binder of all of my stuff: credit reports, receipts of payment, just tons of records. In your case, you may even want to have a professional letter with contact info from whoever your cosigner could be. Not handwritten, but a real business letter.

-Only try to rent from landlords who do not use rental agencies or who ARE the management company. The big agency is going to decline you if you are in the 500s. They just will or at least you should expect that they will. You need to get right to the owners themselves. Some small owners won't even run your credit - they will go by the sense they get from you right off the bat.

-Explain what the deal is BEFORE they run your report. This is important. Don't wait until after they have run the damn thing to say: "Oh, yeah, and..." it makes you look bad.

When I went into my then potential landlord's office with my binder to talk to him, he said "Mr. Tchad, this doesn't look good. I don't think we are going to be able to do this." I then pulled out my binder and said: "Well, let's go through all of it. I am interested in the place and want you to be able to see my records." When he saw that I was ready to go point by point through everything he did a 180. I wasn't expecting it, but from that moment on it was smooth sailing.

I got the place. This was after 6 different leasing/management companies turned me down. It worked and I have tried to pay my rent early every month since. The market may be slightly different in SF than in Chicago, but this wasn't in Mayberry.
posted by Tchad at 6:10 PM on July 8, 2010 [9 favorites]

Fiasco is spot on. If you're dealing with a leasing agent who has discretion in the matter (as opposed to someone who is bound by policy not to rent to people with credit scores below some number), then your attitude / body language probably matter a lot. They'll judge you, unconsciously, in the first 10 seconds of meeting you. If you act cool, confident, dominant, professional, detached, they'll trust you more—instinctively—than if you act nervous, insecure, needy, desperate, submissive, etc. First impressions matter much more than you would think.

Also, people are more easily influenced by other people who they perceive as having higher social status.

If the credit issue comes up, talk about it like it's no big deal at all. Yeah, you fell on hard times, but you learned so much about managing finances and you're so much the better for having had that valuable experience, etc., etc. Frame everything in the most positive manner possible.

At one apartment building, when I toured it I dressed professionally and walked in like I owned the place. Guess what: they treated me accordingly. They didn't even ask me to document my income or give references when I submitted a rental application--and this was the one of the newest, biggest, swankiest, priciest apartment buildings in town, so if anyone would be a stickler for documentation and verification...

ShootTheMoon also makes an excellent point. Private landlords are almost always going to be more flexible than property management companies that are bound by their own rigid policies and have owners that they are accountable to. If you meet a private landlord and really connect with them on a personal level (ask them what they do, see if you have anything in common that you can relate to them on, etc.), you can do wonders. If they feel like they know you and trust you, they might not even bother with the credit check.
posted by brain at 6:29 PM on July 8, 2010 [1 favorite]

Is sharing a place out of the question? Find a place on craigslist that's looking to fill a spot in a house or apartment - depending on the place, you may or may not need to be on the lease, and if not, then no credit check. This city is full of broke-ass recent students who have terrible or no credit, and most have them have places to live, usually with each other.

If you do a year or two in a shared house/flat, that's more time between you and the bad credit, and more time for you to jack up your credit score, and more money you can save towards a place of your own.
posted by rtha at 6:51 PM on July 8, 2010 [1 favorite]

Tchad has the smartest answer on here. When I worked as an agent, as long as people *had been cool with me up front* about their credit issues and what they were, I knew better than to show them a property from a landlord who would never take them. ShootTheMoon is very right when he says that individual landlords will, in some chances, be more flexible - but on the other hand, they have much much more to lose than a large management company does, so they could react the other way, especially in this market. Eviction is difficult and expensive no matter where you are.

Tchad did what I called "going in armed for bear" - going in with all possible paperwork. But also, just explain that you have some dings on your credit, that you've resolved the issues, that you've always paid your rent on time (and please let that be true). Can you get a reference from previous landlords to that effect? I had a lot of landlords who knew that even someone with occasionally shaky credit always made sure the rent got paid, and as long as we could verify that, many of them would take a chance.

You may also need to accept that your mistakes mean that for now, you have to settle with sharing an apartment with someone until you have a respectable gap between your past and your future, and then you can try again when your credit is better. Having a parent cosign is de rigeur in New York, almost no one would be able to move here from elsewhere without a parent since you have to make 40x your rent or have a cosigner.
posted by micawber at 7:10 PM on July 8, 2010

Can you get references from former landlords, attesting that you kept up with your rent?
posted by wryly at 7:42 PM on July 8, 2010

make 40x your rent? do you mean that if your salary isn't 4x your rent, they won't take you?
posted by serena15221 at 10:56 PM on July 8, 2010

serena15221 - some places I'm looking at (in a different country than NYC, but still) require that your annual income be more than 34 times the monthly rent, I'm guessing it's the same scale that applies?
posted by Lebannen at 3:30 AM on July 9, 2010

We did an apartment search in the Bay Area; my husband's credit isn't terrible, but isn't terrific either (thanks to a period of underemployment), and initially we lost out on a couple of places to people who had better credit. What we did for future applications was to print up copies of our credit reports, our savings account balances, and a rental resume with the names of previous landlords, his employer, personal references, and so forth. As long as you can show that there was a reason your credit was bad for a while, and show proof that your income and employment stability will keep money from being an issue in the future, you should be fine.

You may have better luck looking in the less trendy areas of the city - for example the Outer Richmond or the Outer Sunset district. Cold, foggy, but inexpensive, and you will find landlords who may be more negotiable on the credit issue.
posted by Wavelet at 8:33 AM on July 9, 2010

40x the rent - if the rent is $1000, you'd have to make $40k. If the rent is $2000, you'd have to make $80k. Some places will combine incomes if there are roommates, others won't. But yes, in NYC, you have to meet that standard or they won't take you.
posted by micawber at 8:40 AM on July 9, 2010

I've rented in the Bay Area for ten years (four places) and had my credit checked... once? I wasn't even yintentionally avoiding it. Ditto the advice to rent from individuals. If you can sublease a room, even better.
posted by salvia at 8:43 AM on July 9, 2010

posted by salvia at 8:44 AM on July 9, 2010

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