So, is 650 a good credit score for renting an apartment?
In short, it may cause a problem in high cost of living areas yet be acceptable in others.
Potential leasing agents or landlords will usually analyze the credit score of potential applicants to know their financial situation.
Your credit score is your financial report card and it’s usually used to determine how financially responsible you have been in the recent past.
Among credit scores and ratings, this list comprises what landlords will check before approving a potential tenants application:
- Any prior evictions
- Background checks (criminal history/sex offender)
- Credit reports
- Employment history and proof
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Is 650 a Good Credit Score for Renting an Apartment?
Data from RentGrow.com revealed the average credit score of tenants applications approved for rent in 2017 was 650 while the average rejected score was 538.
Even so, having a 650 credit score designates you in a certain category.
The main credit score classifications are as follows:
- Super-Prime – Excellent Credit (740+)
- Prime – Good Credit (680 – 739)
- Near-Prime – Fair/Average Credit (620 – 679)
- Sub-Prime – Poor/Bad Credit (619 and below)
Having a 650 credit score would be considered near-prime from Experian, a Credit Reporting Bureau the above information comes from.
If you’re a near-prime renter, your credit history may reveal missed debt payments and large credit card balances among other negative factors.
Again, credit scores aren’t the only thing landlords examine when it comes to accepting and application.
However, this may be why you are turned down from high-end apartment complexes yet approved at lower to mid-class locations.
- Sidenote: You can Consult a credit repair expert from CreditRepair.com to help in increasing your score!
The simple fact is…
Based on data from the FICO 8 score on mortgage default rates, the odds of defaulting on a loan for those with a 645 near-prime score was 10 percent between 2008 and 2010. The odds for a 685 score prime borrower defaulting during that period was only 5 percent.
Landlords are clearly interested in that information for obvious reasons. And if you fail to make a rent payment after the grace period, an eviction is likely. This will damage your credit score and remain on your report for seven years.
So, is 650 a good credit score for renting an apartment? It’s not exactly ideal based on the above information. But you should be able to secure a place.
A 650 credit score is limiting, but there’s a bright side
And the bright side is individuals who want to rent an apartment with a credit score of 650 and are approved get the benefit of raising their score as they make continued on-time rent payments.
The three Credit Reporting Bureaus (Equifax, TransUnion and Experian) will accept timely rent payment data from landlords if sent.
When researching rental properties, check if property managers report that data to the three bureaus (if they don’t you can simply ask them too). That way, your score will increase overtime.
Be careful when shopping around
And as always, shopping around has it’s benefits.
However, if you have a credit score of 650 or below, you may be tempted to apply to multiple apartments. Of course, the idea is that this will increase your chances of finding a landlord who has lenient terms.
However, be aware that when a landlord pulls your credit, a hard inquiry occurs which affects your credit rating negatively.
Hard inquiries remain your on credit report for 2 years, but will only affect your credit score for 12 months. Hard inquiries account for 10 percent of your credit score.
On the plus side, not every property manager will check credit information, or if they do, they’ll use a service that performs a soft credit check. This method will not affect of your score.
Again, you can always ask what method use when evaluating a potential tenant.
- Related: Infographic on How to Improve a 650 Credit Score
Even better, small landlords are often less conscious of credit score
Any leasing agent or landlord is free to run a credit check on a potential tenant. However, research shows that small landlords are less conscious of credit check.
Most of them (individual landlords and not large apartment complexes) usually make a decision based on a person’s ability to make monthly payments. They’ll usually gauge an individual character over credit score report.
This means that even if they know that you have a credit score of 650 or below they may still be willing to give you a second chance based on how you present your case.
This is different from how well established rental agencies operate. Majority of them have very strict rules that potential tenants must meet before they approve a lease.
You can find landlords that fit this description in newspaper ads or sites like Craigslist.
The rental industry is getting more and more competitive
There is nothing landlords dislike more than seeing their properties lying idle. That is why many of them usually strive to create favorable terms in order to attract tenants.
One crucial factor that will determine your success in renting an apartment with a 650 credit score is the location. Most landlords usually reject individuals who have a credit score of 538 or lower.
If you have a credit score of 650, then you are far above the rejection level. However certain cities have set high minimum credit score, making it hard for people who have a credit score of 650 to find an apartment to rent.
Average credit score per apartment class
More data from RentGrow found that the average credit score for high end or class A apartment in 2017 was about 683. This clearly means you’ll have a difficult time renting such apartments if you have a credit score of 650.
Mid-size buildings or size B have an average credit score of 647 while low-end building (Class C and D) have an average credit score of about 624.
This a good news because it indicates that you can comfortably rent most apartments if you have a credit score of 650.
Location, location, location
However, the location that you intend to rent an apartment matters a lot.
For instance, the average credit score for renters in Boston is about 737. This is far beyond the 650 credit score.
Some cities with high average credit score include:
- Seattle, WA (711)
- Los Angeles, CA (691)
- San Francisco, CA (724)
- Nashville, TN (686)
- Philadelphia, PA (702)
- Chicago, IL (690)
- Portland, OR (690)
If you intend to rent an apartment in cites that have a high demand for housing but the supply is low, then a credit score of 650 will be a huge setback.
What do the experts say
Most experts say that a credit score of 620 is enough to get you a good apartment. If you have a 650 score, then it means that you will not have a difficult time getting a decent place to live.
What to do before you start searching for a rental home
Before you start searching for an apartment, it’s a good idea to obtain a copy of your credit report and also check your score.
The law allows you to get a free copy of your credit report at least once each year. Check the report carefully to see if there are errors.
If you notice errors, then take appropriate action to have them corrected.
Quick tips on how to rent a good apartment with 650 score
Give a leasing agent a good reason why you have a near-prime score. Some people have a fair score not because of unpaid bills but because of a lack of credit history.
Some may have a near-prime score because they haven’t borrowed anything for a long period of time. If your explanation is reasonable, then the landlord may lease the apartment to you.
Another great way to own an apartment with a 650 score is paying rent upfront for several months if you can.
You can also ask a friend or a family member who has a good credit score to cosign the lease.