Credit score requirements for rentals are rising: What you need to know

shutterstock_567634105 (1)

DISCLAIMER: As the COVID-19 public health situation evolves, new regulations are being continually issued. This page/story/information may not include the most recent information.

By Maurie BackmanMotley Fool

Over past 3 years, average credit score increased by 1 point per year. You may need even stronger credit to rent a home these days.

You may have heard the higher your credit score, the more financial flexibility you’ll have. Having solid credit makes it more likely you’ll get approved for a new credit card, auto loan, or mortgage. And if you’re seeking to rent a home rather than buy one, strong credit could be your ticket to a lease.

In fact, the average credit score required to get an apartment is on the rise. Over the past three years, it’s increased by one point per year, reports RentCafe. And in a study of more than 5 million lease applications, the average credit score of U.S. renters was 638 in 2020.

Not surprisingly, renters in higher-end buildings tended to have better credit — an average score of 669. On the other hand, renters in low-end buildings had an average score of 597.

Either way, having good credit could spell the difference between getting your name on a lease or having to move back with your parents. Or couch-surf in the absence of a landlord who’s willing to take you on. And so, if yours isn’t where it needs to be, here are a few things you can do to boost your credit score.

1. Pay all incoming bills on time

Your payment history is the single most important factor that goes into your credit score calculation. It speaks to how well you pay your bills on time. If you want that number to increase, don’t be late with your bills — it’s that simple. For the most part, it also means paying all your bills in full, though there are exceptions. For example, let’s say you submit your minimum credit card payment each month by its due date. You’ll be counted as timely for credit score purposes, even if you carry the remainder of your balance forward.

2. Pay off some existing credit card debt

Paying off debt is easier said than done, but if you’re able to whittle down an existing credit card balance, it could really work wonders for your credit score. The less outstanding credit card debt you have, the lower your credit utilization ratio will be. That’s a measure that calculates your existing debt relative to your total available credit.

A ratio of 30% or below will help your credit score, so take a look at how much credit you have available and compare that to what you owe. Perhaps your total spending limit among all of your credit cards is $10,000 and you’re carrying a balance of $3,400. In that case, paying off $400 will knock your utilization ratio down into more favorable territory.

3. Check your credit report for errors

Sometimes, mistakes happen on credit reports. If there’s an error on one of yours that’s working against you, your credit score might rise if you get it fixed. It could be that one credit bureau has you flagged with a delinquent debt that you never racked up in the first place. Or, maybe your credit report still shows a debt you settled long ago. Request a copy of your report from each bureau — Experian, Equifax, and TransUnion — and see what’s up. You may have to get in contact with one or more bureaus to hash out errors, but it’ll be worth it when your score improves as those issues get resolved.

When it comes to renting a home, there’s really no such thing as a minimum credit score requirement. Each landlord will ultimately decide what credit score he or she is comfortable with. But the higher your credit score, the more likely you’ll be to get approved, so if that number needs a boost, get moving — before the time comes to sign a new lease.

Top credit card wipes out interest until 2022 If you have credit card debt, transferring it to this top balance transfer card can allow you to pay 0% interest for a whopping 18 months! That’s one reason our experts rate this card as a top pick to help get control of your debt. It’ll allow you to pay 0% interest on both balance transfers and new purchases until 2022, and you’ll pay no annual fee. Read our full review for free and apply in just 2 minutes.


Michigan license number:   DM-0016282 Available to the public and licensed in Michigan.

Section 13(1)  When a licensee establishes a debt management plan for a debtor, the licensee may charge and receive an initial fee of $50.00

Section 13(2)  A licensee shall attempt to obtain consent to participate in a debt management plan from at least 51%, in number or dollar amount, of the debtor’s creditors within 90 days after establishing the debt management plan. If the required consent is not actually received by the licensee, the licensee shall provide notice to the debtor of the lack of required consent and the debtor may, at its option, close the account. If the debtor decides to close the account, any unexpended funds shall be returned to the debtor or disbursed as directed by the debtor.

Sec. 14. (1) A contract between a licensee and debtor shall include all of the following:

(a) Each creditor to which payments will be made and the amount owed each creditor. A licensee may rely on records of the debtor and other information available to it to determine the amount owed to a creditor.

(b) The total amount of the licensee’s charges.

(c) The beginning and termination dates of the contract.

(d) The principal amount and approximate interest charges of the debtor’s obligations to be paid under the debt management plan.

(e) The name and address of the licensee and of the debtor.

(f) Any other provisions or disclosures that the director determines are necessary for the protection of the debtor and the proper conduct of business by a licensee.

Sec. 18. (1) In addition to the fee described in section 13(1), a licensee may charge a reasonable fee for providing debt management services under a debt management plan. The fee under this subsection shall not exceed 15% of the amount of the debt to be liquidated during the express term of the plan.

(2) A licensee may offer a debtor the option to purchase credit reports or educational materials and products, and charge a fee to the debtor if the debtor elects to purchase any of those items from the licensee.  Fees charged under this subsection are not subject to the 15% limitation on fees described in subsection (1).

(3) Except for a cancellation described in subsection (4), in the event of cancellation of or default in the performance of the contract by the debtor before its successful completion, a licensee may collect $25.00 in addition to any fees and charges of the licensee previously received by the licensee. This $25.00 fee is not subject to the 15% limitation on fees and charges under subsection (1).

(4) A contract is in effect when it is signed by the licensee and the debtor and the debtor has made a payment of any amount to the licensee. The debtor has the right to cancel the contract until 12 midnight of the third business day after the first day the contract is in effect by delivering written notice of cancellation to the licensee. A cancellation described in this section is not subject to, and a licensee shall not collect, the fee described in subsection (3).

(5) If a debtor fails to make a payment of any amount to a licensee within 60 days after the date a payment is due under a contract, the licensee may, in its discretion, cancel the debt management contract if it determines that the plan is no longer suitable for the debtor, the debtor fails to affirmatively communicate to the licensee the debtor’s desire to continue the plan, or the creditors of the debtor refuse to continue accepting payments under the plan.

(6) A licensee shall not contract for, receive, or charge a debtor an amount greater than authorized by this act. A person that violates this subsection, except as the result of an inadvertent clerical or computer error, shall return to the debtor the amount of the payments received from or on behalf of the debtor and not distributed to creditors, and, as a penalty, an amount equal to the amount overcharged.

530 W Allegan Street, 7th Floor
Lansing, MI  48909-7720

Credit Advisor Logo 3

Schedule a Call Back

Credit Advisor Logo 3

Get Help Now!