Renting with bad credit

In this guide, we've looked into how to rent with poor credit.

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Renting is a great way of having your own space and independence when you’re not in a position to buy a home of your own.

However, if you need to rent somewhere new or are moving out of home for the first time and your credit history isn’t great, you may wonder if renting a property is possible for you.

The good news is that even with a bad credit history, you can rent a property, but you may need to do a little prep beforehand or try an alternative to the traditional letting agent route. Here are our top tips for renting with bad credit:

  • Check your credit report
  • Clear outstanding debts
  • Get a great reference from your current landlord
  • Be honest and upfront about your situation
  • Look into a private landlord over a letting agent
  • Offer a bigger deposit or more rent upfront (if possible)
  • Find a roommate
  • Speak to someone about being a guarantor for you

1. Take a look at your credit report

Before you do anything, it’s important to understand exactly how your credit history is looking, and what letting agents and landlords will be looking at when they check your credit history as part of the application process to rent a property. Negative markers on your credit report, such as accounts in default, could see you struggle to be accepted for a tenancy agreement.

However, it’s not impossible. You can get a copy of your credit report from one of the Credit Reference Agencies, such as Experian, Equifax or TransUnion. Or, we recommend you use a free service such as Credit Karma or Clearscore. Once you know where you stand, you can look to repair any areas that could impact your ability to get through the landlord’s checks.

2. Tackle outstanding debt

We understand that reducing your outstanding debt is often easier said than done. It will help if you are able to deal with defaults and pay off and close any of your outstanding credit accounts before applying to rent a property. This could improve your chances of being accepted.

Look for ways to free up cash to help you  – perhaps you could take on a second job or start a side business to boost your income, or use your house move as an opportunity for a clear out and sell on those unwanted items. Take a look at our guide on how to fix bad credit here.

3. Get a glowing reference from your current landlord or letting agency

If you currently rent, have kept up with payments and have kept the property in good order, a good reference from your current landlord can be a huge help. You can present this to your potential landlords as evidence that you are a good tenant, and help influence their decision to rent to you and look past blemishes in your credit history.

4. Explain the situation

Some agencies and landlords can be understanding and sympathetic to your situation if you explain. If you’re open and honest about what has happened with your finances and can prove that things are on track now, then this may go in your favour. Support your discussion with evidence that you’ve made your rent repayments on time and in full in the past.

5. Look for a private landlord

If you’re struggling to find a letting agency that will accept you, then pick up the local newspaper or classified ad sites like Gumtree and find a private landlord who doesn’t use a letting agency. They’re more likely to work based on references than credit checks, which could be better for you.

6. Offer a bigger deposit or more rent up front

We understand that this isn’t a possibility for many people – in fact, finding enough money to cover a deposit equivalent to six weeks rent as well as the first month’s payment up front is challenging for most of us! However, if it is possible, providing a bigger deposit can help secure that tenancy agreement as the landlord receives more cash up front.

Offering a larger deposit can also help if there are others interested in the property; if you need a home desperately, it can be a quick way to get through the door.

7. Move in with someone

Applying alone with existing bad credit can reduce the likelihood of you being able to take on the tenancy agreement. So, try living with someone else. It could be your sister or brother, a friend or your partner – whoever it is, if their credit history is better than yours and they’re able to make a joint application with you, this could improve your chances.

Plus, moving in with somebody means you can split the cost of the rent between you and make it much more affordable. It’s important to remember, though, that if one of you is ever unable to pay their half, the other will be expected to pay the full amount.

8. Provide a guarantor

If you have a close friend or relative with a strong credit history, a decent income or savings and willingness to be able to help if you ever needed it, then speak to them about being put forward as your guarantor. This means that if for any reason, you are ever unable to cover the cost of the rent, they will step in and pay on your behalf.

If your guarantor asks you to, you would then need to repay them but as far as your landlord is concerned, your rent will have been paid.

Representative 89% APR

Representative Example: Borrowing: £1000 for 18 months, Total Repayable: £1853.43, Total Interest: £853.43, Interest Rate (Variable): 89.9%. Rates between 9.3% APR and 1721% APR – your no-obligation quote and APR will be based on your personal circumstances. Loan term lengths from 3 to 36 months. Subject to lender’s requirements and approval.

Sunny Loans is a registered trading name of Flux Funding Limited who are a credit broker, not a lender. Loan repayment terms are 3-36 month loans.

Warning: Late repayment can cause you serious money problems. For help, go to www.moneyhelper.org.uk.

Looking for information on borrowing and credit?

Want to read more about bad credit and borrowing money? Click on one of our guides below for more information.

Bad Credit Loan Guides