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A person often makes renting an apartment one of their most significant financial commitments. The tenant’s credit score plays a crucial role in this process, reflecting their financial health and reliability. Landlords use credit scores to assess the risk of renting to a potential tenant; many landlords establish their own minimum credit score thresholds based on factors such as location and property type, with a higher score typically indicating a lower risk of late payments or defaults.
In highly competitive rental markets, credit scores can even be the deciding factor between applicants. Prospective tenants can strategize and present themselves as ideal candidates by understanding the average credit score needed to secure a rental.
In this article, I’ll explain the credit score spectrum along with the key reasons why credit scores matter when renting an apartment.
Understanding the Credit Score Spectrum
Credit scores are numerical representations of an individual’s creditworthiness, ranging from 300 to 850. Generally, a score of 700 or above is considered good, while anything above 800 is excellent. Credit bureaus calculate these scores based on several factors, including payment history, credit utilization, length of credit history, types of credit used, and recent inquiries.
Here’s a deeper look into the credit score spectrum and its implications for renting an apartment.
Credit Score Range
1. Poor (300 – 579):
- Scores in this range indicate significant credit issues, such as missed payments or high debt levels. Renters with poor credit, specifically scores below 580, may face challenges securing a lease, as landlords often perceive them as high-risk tenants.
2. Fair (580 – 669):
- A fair score suggests some credit problems but also indicates the potential for improvement. While some landlords may accept applicants with fair credit, they may require additional assurances, such as a larger security deposit or a co-signer.
- According to the Zebra survey data, 7.7% of the respondents had a fair credit score out of 1500.
3. Good (670 – 739):
- A good score reflects responsible credit behavior. Applicants in this range are generally considered trustworthy, making it easier to secure rental properties. Most landlords prefer tenants with scores in this category.
4. Very Good (740 – 799):
- Scores in this range demonstrate strong credit management. Renters with very good scores will likely have numerous options and may negotiate better lease terms.
5. Excellent (800 – 850):
- An exceptional credit behavior defines this range, characterized by on-time payments and low credit utilization. Applicants in this category are highly attractive to landlords, often receiving favorable terms and lower deposits.
Rental Credit Score Variations by Location and Property Type
Most landlords look for a minimum credit score needed between 620 and 700 for rental applications. However, this range can vary significantly based on factors like location and type of apartment or property:
- Urban Areas and Luxury Apartments: High-demand areas or upscale properties often require scores of 700 or higher to qualify. Landlords in these markets tend to be more selective due to the large pool of applicants and the desire to minimize risk.
- Suburban or Affordable Housing: In less competitive markets, a score of around 620 may suffice. Some properties may even accept lower scores, especially if other aspects of the application are strong.
- Low-Credit Options: Approval is still possible for applicants with scores below 620, but it may come with additional requirements, such as co-signers, larger security deposits, or higher rent.
According to a 2020 analysis by RentCafe, the average credit score of renters in the U.S. was 638, with variations depending on the city. For example, renters in San Francisco averaged 719, while Arlington’s averaged 580.
Let’s look into the latest average FICO credit score.
Top 10 Nation’s Big Cities Average FICO Score, 2024
Here are the top 10 nation’s big cities with the average FICO credit scores in 2024:
Metro | Average FICO Score, 2024 |
| Portland, OR | 737 |
| San Diego | 728 |
| Raleigh, NC | 727 |
| Salt Lake City | 726 |
| Los Angeles | 720 |
| Austin, TX | 719 |
| Nashville, TN | 718 |
| Tucson, AZ | 715 |
| Indianapolis | 713 |
| Phoenix | 712 |
The high average FICO scores in these cities result from factors like strong economies, higher median incomes, and access to well-paying jobs, especially in tech hubs like Austin, Raleigh, and Portland. Cities with educated populations, such as Raleigh and Salt Lake City, benefit from greater financial literacy. Competitive housing markets in places like San Diego and Los Angeles encourage better credit management, while affordable living in cities like Tucson and Indianapolis reduces financial stress. These elements, combined with community emphasis on financial responsibility, contribute to higher credit scores.
Top 10 U.S. Cities With the Highest Average FICO Credit Scores, 2024
Here are the top 10 U.S. cities with the highest average FICO credit scores in 2024:
Metro | Average FICO Score, 2024 |
| Boulder, CO | 754 |
| Madison, WI | 751 |
| Appleton, WI | 748 |
| San Jose, CA | 747 |
| Rochester, MN | 747 |
| La Crosse, WI | 746 |
| Burlington, VT | 746 |
| Corvallis, OR | 746 |
| State College, PA | 745 |
| Fort Collins, CO | 744 |
These cities have demonstrated strong financial health, with average credit scores significantly above the national average of 715.
High average credit scores in these areas suggest residents manage credit responsibly, which can be advantageous when applying for rentals, as landlords often prefer tenants with higher credit scores.
Note: All the above-presented average FICO credit scores are taken from Experian data, a leading credit bureau.
Why Credit Scores Are Key in Renting an Apartment?
Credit scores play a vital role in the rental process. While a solid rental agreement doesn’t directly affect credit, consistent on-time rent payments, especially when reported to credit bureaus, can enhance a tenant’s creditworthiness and demonstrate financial reliability. Here are the main reasons why credit scores matter:
1. Indicator of Financial Responsibility
A higher credit score reflects a history of on-time payments and responsible credit use. Landlords use this information to assess whether a potential tenant is likely to pay rent consistently.
A recent Fannie Mae survey shows that over 80% of renters want their on-time rent payments included in their credit scores, which would provide them with greater financial opportunities.
2. Risk Assessment
Landlords view low credit scores as potential red flags, indicating financial instability or a history of late payments. By screening applicants based on credit scores and conducting thorough background checks, landlords aim to minimize financial risk.
A recent Census report revealed that nearly half (49.7%) of the 42.5 million renter households in the United States are considered rent-burdened.
3. Standardized Evaluation
Credit scores provide a consistent method for evaluating multiple applicants. Credit checks are a critical part of this standardization, helping landlords assess the financial stability and reliability of prospective tenants. This standardization helps landlords make informed decisions when faced with numerous applications.
According to Zebra renting statistics, 77% of the people in the US prefer to rent.
4. Insights into Rental History
Credit reports can reveal a tenant’s rental history, including any past evictions or outstanding balances. High credit card balances can also be a red flag, as they suggest financial instability, which aids landlords in assessing an applicant’s behavior as a tenant.
5. Negotiation Leverage
Tenants with higher credit scores may have an advantage in negotiating lease terms, such as lower security deposits or reduced rent, as landlords are often more inclined to offer favorable conditions. Conversely, offering a higher security deposit can demonstrate financial responsibility and mitigate perceived risks for landlords, which may improve the chances of securing a rental agreement.
Understanding the importance of credit scores can help you prepare stronger applications. If you have a bad credit score, read another article where you can learn how to rent a property with a low credit score and how you can improve your credit score.
Presenting a Strong Rental Application
To enhance your chances of securing an apartment, consider the following tips:
- Prepare Documentation: Gather all necessary documents, including proof of income, references, and your credit report. Ensure that your cosigner, if you have one, meets the necessary credit score and income requirements to strengthen your application.
- Write a Cover Letter: Personalize your application with a brief letter explaining why you would be a great tenant. Highlight your reliability and any mitigating factors related to your credit score.
- Be Flexible: Show willingness to negotiate on lease terms, such as move-in dates or lease length, to make your application more appealing.
Conclusion on minimum credit score to rent a house
Understanding the average credit score needed to rent an apartment is crucial for prospective tenants. While a good credit score can ease the application process, other factors such as income, rental history, and personal character play significant roles in securing a lease. By taking proactive steps to improve your credit and presenting a strong application, you can navigate the rental market successfully, regardless of where you stand on the credit score spectrum.
If you’re looking for a rental in the Oklahoma metro area, let OKC Home Realty Services help you find the perfect property. Our team understands the importance of credit scores and works with tenants to make the process smooth and straightforward. Contact us today to learn more!
FAQs on Average Credit Score to Rent an Apartment
Do landlords do hard or soft credit checks?
Landlords typically perform soft credit checks, which don’t impact a tenant’s credit score. These checks provide a general view of the applicant’s credit history and are common in rental screenings. However, in some cases, like when a landlord pulls a full credit report directly or in rent-to-own situations, a hard credit check may be done, which can slightly lower the score. Landlords should always get permission and clearly state the type of check they’ll run.
Can I rent an apartment with a 580 credit score?
Yes, you can rent an apartment with a 580 credit score, but it might be a bit challenging. Many landlords see scores below 600 as a potential risk, so they may ask for extra assurances, like a larger security deposit, a co-signer, or proof of stable income. Some private landlords or smaller property managers may be more flexible than big apartment complexes. To improve your chances, be upfront about your situation and highlight any positives, like a steady job, good rental history, or references.
Author
Scott Nachatilo is an investor, property manager and owner of OKC Home Realty Services – one of the best property management companies in Oklahoma City. His mission is to help landlords and real estate investors to manage their property in Oklahoma.
