As many Millennials know, renting an apartment in Chicago or anywhere in Illinois isn’t necessarily easy. Landlords typically check credit reports as part of the application approval process, and applicants with bad credit are often denied. However, a recent study reveals that it isn’t just a low credit score that hurts a Millennial’s chances of renting an apartment in Illinois. As it turns out, there is one particular type of negative credit report item that causes a lot of landlords to reject rental applications. In fact, about one-third of Millennials who are denied rental opportunities are turned down for this reason.
Why Having Accounts in Debt Collections is the Worst Thing for Millennials Looking for Apartments in Illinois
According to a recent study conducted by Rent Café, more Illinois landlords reject potential renters with accounts in debt collections than for any other reason. Surprisingly, Millennials with negative or insufficient rental histories have better chances at renting apartments than those with charge-offs in their credit histories. This is probably because, when looking through rental applications, landlords are most concerned with finding the tenants who are most likely to pay on time. Unfortunately, those with accounts in debt collections don’t appear as timely payers.
Another finding from the Rent Café study is that there is a connection between low credit scores and rental rejections. Apparently, on average, landlords approve only 48% of Illinois applicants with credit scores below 500. Whereas, landlords offer leasing contracts to 98% of Millennials with credit scores over 750.
Obviously, having accounts in debt collections does significant damage to credit scores. These items also linger on credit reports for up to seven years in Illinois. This is why it is important for Millennials to create and stick to realistic household budgets. Even missing a credit card or loan payment due date by 30 days or more can cause your credit score to drop. Then, when creditors send accounts to debt collection agencies, consumers lose even more credit score points. Of course, there are other ways in which credit scores are damaged in Illinois.
Why Illinois Millennials Should Regularly Check their Credit Reports
A low credit score can make several things in life harder or more expensive. For example, Millennials in Illinois with bad credit may not get approved for loans or credit cards. If approved, they probably face higher interest rates. Illinois residents with bad credit also pay more for car insurance, and as mentioned above, often have trouble renting apartments.
In addition to late payments and accounts in debt collections, other factors can negatively affect credit scores. For instance, Millennials who become victims of identity theft are frequently left with fraudulent accounts on their credit reports that harm their credit scores. Also, mistakes and errors on credit reports can bring down credit scores, and these types of inaccuracies are very common.
The Fair and Accurate Credit Transactions Act (FACTA) entitles all consumers to a free copy of their credit report from each of the major credit bureaus every 12 months. For Millennials who have never checked their credit reports, there is an easy one-stop shop for all three credit reports. Just go to www.annualcreditreport.com and request copies of your credit report from TransUnion, Experian, and Equifax. Once you have access to your credit reports, look them over carefully for unauthorized charges and accounts, and for errors and mistakes.
If you find that anything is wrong with one, two, or all three of your credit reports, call Credit Repair Lawyers of America in Illinois. Our team of experienced credit attorneys will fix your credit for free. Even if you just suspect credit report flaws, contact us, and our credit pros will go over them with you.
The Free and Legal Way to Get Better Credit
Don’t let errors on your credit reports bring your credit score down. At Credit Repair Lawyers of America, we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? All of our fees come from the defendants in settled cases. This is why our clients pay nothing for the work we do.
Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Gary Nitzkin at (855) 956-2089 or sending him a message through our contact page.
FAQs
Apparently, on average, landlords approve only 48% of Illinois applicants with credit scores below 500. Whereas, landlords offer leasing contracts to 98% of Millennials with credit scores over 750. Obviously, having accounts in debt collections does significant damage to credit scores.
What is the lowest credit score you can have to rent? ›
Generally, most landlords require applicants to have a credit score of at least 620 to be considered for rental housing. This means that if your FICO score is lower than 620, you may be denied an application or asked for additional security deposits or co-signers before being approved.
How can poor credit affect renting? ›
If you have bad credit, this could result in a rejection for the apartment or a more expensive security deposit. However, that's not always the case. Some landlords don't check credit at all, while others are willing to overlook iffy credit if you can prove your responsibility and trustworthiness in other ways.
Why are millennials renting instead of buying? ›
Instead of pursuing the traditional American Dream, Millennials believe that their wealth will be in their savings account and, most importantly to them, the experiences they gain while living. As such, the short-term costs of renting are far easier to bear than those that come with purchasing a home.
Can you rent with a 0 credit score? ›
Most large property management companies require a credit check as part of their application process. However, some individual landlords, who own one or a couple of rental properties, might let you rent without established credit. Generally, these individual landlords will still ask you to prove income stability.
Can you get an apartment with a credit score of 500? ›
Yes, renting an apartment with a 500 or below credit score is possible. However, you might not get the apartment of your dreams until that score improves. Fortunately, you can still get a decent apartment if you provide strong proof of income, get a co-signer, or rent on a month-to-month basis.
What is too low credit score for apartment? ›
Consider having a roommate: If your credit score isn't strong enough to secure an apartment on your own, consider having a roommate who can make up for your lower score. If this individual can cover rental payments on their income, your landlord may be more willing to consider your application.
Can an apartment deny you based on credit score? ›
If you have a bad credit history, the landlord can decide not to rent to you, or can ask you to pay higher rent. If this happens, the landlord must give you the name of the credit reporting agency he used.
Why do landlords care about credit score? ›
When landlords look at your credit history, they examine a few factors. For instance, they want to see your overall credit score, payment history, bankruptcies, foreclosures, and overall credit activity. After all, they want to ensure you can pay your rent each month and pay for potential damages, should they occur.
Should I rent to someone with a 580 credit score? ›
From 740 to 799 is considered very good, and from 580 to 669 is regarded as a fair score. The credit score required to get approval for a rental application varies depending on the landlord or property management company. However, most landlords want applicants with a score of around 625 or higher.
In the millennial age ranges of 25 to 34 (37.41%) and 35 to 44 (32.63%), paying more than 30% of the salary for rent or mortgage payments is common.
What type of housing do millennials want? ›
Millennials — defined as those born from 1980 through 1999 — make up the largest share of homebuyers and mostly want single-family homes in the suburbs, according to the 2022 National Association of Realtors® Home Buyers and Sellers Generational Trends Report.
Why do rich people rent houses and not buy? ›
Tight home inventory, high mortgage rates and rising costs have many affluent individuals ditching the downpayment for a security deposit. The number of households making over $150,000 that rent rose 87% from 2016 to 2021, according to the U.S. Census Bureau.
What is the lowest credit score to rent a house? ›
In general, a landlord will look for a credit score that is at least “good,” which is generally in the range of 670 to 739.
How to explain no credit to a landlord? ›
Be honest and explain why you have poor credit
If you're filling out a rental application, attach a letter explaining why you have no credit history. You might be a fresh college graduate who's never had a credit card, for example. If you've made credit mistakes in the past, provide a reason why it won't happen again.
Is no credit bad for an apartment? ›
While a better credit score can make it easier for your rental application to be approved, it is still possible to rent with low or no credit and establish positive financial habits to build your credit while renting.
Can I rent with a credit score of 580? ›
Landlords generally prefer a minimum credit score of at least “good,” which is 670 to 739. A score at or above that range will make apartment applications easier. Still, even a “fair” (580 to 669) or “poor” (300 to 579) score won't necessarily put the kibosh on your rental hopes.
Can I rent with a credit score of 600? ›
According to FICO, 600 is considered a fair credit score. The company says a score above 670 is better. While 600 may not be as desirable to landlords, it still may be possible. That's because acceptable credit scores can vary by region and a landlord's discretion.
Can I rent with a 300 credit score? ›
For example, a poor FICO score is considered to be 300–579 and a poor VantageScore is 300–660. This doesn't mean that renting an apartment with bad credit is impossible—but you may have to take some extra steps to increase your chances of being approved.
What credit score do landlords use? ›
Most landlords use FICO credit scores to determine if an applicant qualifies for an apartment. The typical categories for those scores are: Exceptional: 800 to 850. Very Good: 740 to 799.
