How to prepare before applying

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Getting approved for your first apartment involves a lot of paperwork.

Fortunately, most apartment applications are made online, especially since the onset of the coronavirus pandemic. But homeowners and property management companies will always ask for your personal information so they can do a thorough credit and background check.

Each state, city, and apartment complex has different requirements, but most rental applications ask for similar information for each applicant / resident, so they can verify your identity and ability to pay rent. This will include your personal contact details, social security number, current and previous addresses, employer information and proof of income, emergency contacts, and vehicle information (if applicable).

Although this is only basic information, rental applications can still be plentiful. Hopefully – you have a clean criminal record, a good rental history (no evictions) and have proven that you can afford your new place (whether through income or with help from ‘a guarantor) – a new home awaits you on the other side.

To help you make it happen, CNBC Select has put together a few ways to improve your credit score and impress your potential owner. Of course, there are no guarantees, but you can improve your chances of getting an apartment with these four simple tips.

The earlier you start, the better. You want to start preparing at least three months before you know you want to apply for a new place, but six months or more gives you the best edge. Even if you’re not sure where you want to live in months to come, these steps will help you feel confident in your application when you finally find your place.

1. Know what’s on your credit report in advance

There is nothing better than applying for a rental knowing exactly what your future landlord will see when they perform a credit check. And since you need to act quickly when applying for an apartment, be prepared and confident by knowing the ins and outs of your credit report ahead of time.

Before you start looking for an apartment, visit AnnualCreditReport.com and download your free reports from each of the three major credit bureaus: Experian, Equifax and TransUnion. Until April 20, 2022, you can download the three weeklies for free.

Once you have downloaded your report, it is important to examine it carefully. If you have student loans or persistent credit card balances, you won’t be surprised to see them. You will also see your credit score, which you may already know.

However, you want to search negative marks you did not know, then take the time to dispute errors and repair your partition if necessary.

Once you’ve reviewed your credit report, sign up for a credit monitoring service that scans your credit accounts for activity and helps you track your payment progress, changes to your accounts, score updates and more.

Capital One’s CreditWise® is a free credit monitoring service that does not require you to enter a credit card number to register and offers a wide range of features. Likewise, Experian offers a free credit monitoring service with a variety of useful benefits like real-time alerts for changes in your personal information and suspicious activity detected on your Experian credit report.

Experian Dark Web Scan + Credit Monitoring

On the secure Experian site

  • Cost

  • Supervised credit bureaus

  • Credit rating model used

  • Dark web analysis

  • Identity insurance

2. Improve your credit score

To best optimize your credit score, it is important to know how it is calculated. The most popular FICO score The model examines five key factors:

  1. Payment history (35%): If you paid off old credit accounts on time
  2. Amounts due (30%): The total amount of credit and loans you are using against your total credit limit, also known as the usage rate
  3. Length of credit history (15%): The duration of your credit
  4. New credit (10%): How often do you request and open new accounts
  5. Credit mix (10%): The variety of credit products you have available including credit cards, installment loans, finance company accounts, mortgages, and more.

To quickly see an increase in your credit score, pay off as much debt as possible on your credit card without completely depleting your cash reserves. Do this more than 30 days before your application so that your score has a chance to update. Pay off revolving credit card debt first improves your total amounts owed, contributing to a healthier overall score.

Learn more about how to pay off credit card debt.

You can also take advantage of the free feature of Experian Experian Boost ™, which allows you to add positive payments for telephone and utility bills to your Experian credit report, potentially increasing your credit score. If you don’t have any utilities in your name yet, you can add netflix payments on time to your Experian Boost account while you are still living at home.

3. Have a clear picture of your finances

You will need to show proof of income when you apply for an apartment, which normally means a pay stub and / or an income tax return.

But in addition, you should also be prepared to provide statements for both your verification and savings accounts. This is not always necessary, but it never hurts to show proof that you have savings set aside for your security deposit and incidental costs such as installation fees, parking fees and charges. maintenance costs (depending on your owner / management company).

4. Avoid new credit requests

If you can avoid it, don’t apply for new credit cards, car loans, or other types of credit products right before you apply for an apartment.

When a lender performs a credit check, it leads to what is called a difficult investigation in your credit history. Serious claims appear on the credit report prepared by the lender and may result in a temporary decrease in your credit score.

While the decrease is usually insignificant, around five points or so, it can send red flags to potential homeowners. Its negative impact decreases over time, despite the inquiries remaining on your credit report for two years.

5. Increase your savings

Before moving into a new apartment, be prepared for the rising cost of living.

If you have the option of living rent-free with a family member while working from home, take advantage of that by “paying” your rent in the months leading up to your move. Each month, transfer enough money to cover the rent of your future apartment to a savings account. After six months, you’ll have a nice emergency cushion and you’ll have built the budget muscle to know you can afford your future costs.

For this tip, Ally is a good choice because you can do all your banking in one place. While the Ally Online Savings Account is a good high yielding account on its own, account holders can enjoy even more benefits if they also have a Allied interest checking account. If you have an Ally Savings account, you can create 10 different “buckets” in the same account, easily organizing your money. You can create a designated fund for your security deposit and one called “Emergency Savings” where you can hide these convenient rent payments.

Ally Bank Online Savings Account

  • Annual percentage return (APY)

  • The minimum balance

  • Monthly fee

    No monthly maintenance fees

  • Maximum transactions

    Up to 6 free withdrawals or transfers per statement cycle * The reporting cycle 6 / withdrawal limit is waived during the coronavirus outbreak under Regulation D

  • Excessive transaction fees

  • Overdraft fees

  • Offer a checking account?

  • Offer a bank card?

    Yes, if you have an Ally checking account

Allied interest checking account

The information on the Ally Interest Control Account was independently collected by CNBC and was not reviewed or provided by the bank prior to publication. Ally is a member of the FDIC.

  • Monthly maintenance fees

  • Minimum deposit to open

  • The minimum balance

  • Annual percentage return (APY)

    0.10% less than $ 15,000 minimum daily balance; 0.25% on the minimum daily balance of $ 15,000

  • Free ATM network

  • Reimbursement of ATM fees

    Up to $ 10 per statement cycle

  • Overdraft fees

  • Mobile check deposit

Editorial note: The opinions, analyzes, criticisms or recommendations expressed in this article are those of the editorial staff of Select and have not been reviewed, endorsed or otherwise approved by any third party.


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