How to get the rental you want even if you have bad credit

Your credit score matters when it comes to renting a home. Landlords can and do carry out credit checks on potential tenants (but remember, they have to get your permission first). If you’ve got a great big black mark on your credit history – or even a little black dot – you’ll probably kiss that rental goodbye.

It sounds unfair and could leave you homeless. But landlords aren’t running a charity. A bad credit history rings alarm bells to landlords and most believe that two and two equals four so therefore you won’t view paying the rent as a priority.

You can resurrect your credit score over time, but the crunch is that you need a home now.

If you can convince potential landlords or property managers to listen to you, then explain what went wrong in the past. Give him or her concrete reasons to believe that you’re going to be a model tenant now.

Here are seven sales pitches to overcome your bad credit and get a rental:

1. Tell your story
   Why do you have bad credit? Sometimes there’s a perfectly valid reason that your landlord will understand. Maybe you had a business or marriage failure, but you have evidence to show that you were a good payer prior to this personal disaster. The more paperwork you can show to back up your case the better. Don’t expect your landlord to feel sorry for you however if you simply didn’t pay your bills and drank or partied your rent away.
2. Find a guarantor
   If you can find someone such as a parent or grandparent to go guarantor for you, this should satisfy some of your landlord’s worries. A guarantor signs a guarantee that they will pay your rent if you don’t. If you front foot the landlord with the offer of a guarantor, rather than vice versa, you do your case a lot of good. Having a guarantor won’t always satisfy landlords. They often believe, and there’s some truth in this, that people who are bad bill payers might not have high standards in other parts of their lives and could damage the property.
3. Agree to pay automatically
   Landlords love tenants who set up automatic payments (APs). If you volunteer at the outset the landlord may view you more charitably. It’s one big headache out of the way for them. Work and Income clients can arrange for their rent to be paid by AP. If you do get a foot in the door don’t blow it by letting the AP bounce. You’ll get yourself booted out before you know it if you do this (although the landlord does have to give notice or get an order from the Tenancy Tribunal). You don’t want to go back to square one, or worse. It’s always a good idea to time the rent payment to go out on the same day you’re paid.
4. Offer to pay the maximum bond
   Chances are your landlord will want the maximum bond of four weeks’ rent anyway. But if you make it clear at the open home that you have the total amount available immediately you might look better than the other potential tenant who wants to bargain the landlord down on the bond. Landlords can’t by law take more than four weeks rent or any other forms of security such as ‘pet bond’. It’s illegal.
5. Show solid income
   If your bad credit came from your time as a student, unemployed, underemployed, or it was sexually transmitted debt and you can show your circumstances have changed a landlord might be willing to consider you. Strengthen your case with payslips for your new job and any other financial information such as bank statements that back up your story.
6. Get references from your existing landlord
   This can help. But landlords are sometimes wary of references in case the last landlord wrote it to get rid of you, or for that matter it’s fake. I’ve heard of cases where the clients were smoking methamphetamine on the property. The landlord was so desperate to get rid of these problematic tenants that he wrote them a glowing reference.
7. Be a flatmate instead of tenant
   If you really can’t find a landlord to take you on then consider being a flatmate in the meantime whilst you resurrect your credit. Or if it’s a group of you going flatting can you arrange for someone else to be the lead tenant who signs the tenancy agreement? If the lead tenant is renting through an agency you might want to make contact. Show a record of your regular payments to your flat account and put your name down in case another property comes up with the same agency. Read our top tips for new renters before you apply. If you’re a family, perhaps there is a tenant with a minor dwelling that could be sublet to you.

If you do land this tenancy, whatever you do, make sure you live up to your promises. Paying your rent (utilities, credit card and other bills) on time every week without fail may help resurrect your credit score and will give you a track record of being a good tenant to fall back on in the future.