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What credit score do you need to rent an apartment in California?

Renting an apartment is exciting but may seem overwhelming if you're not prepared. Before you start your apartment search, know that in some cases you may need to show a minimum credit score to rent apartment and agree to a credit check by the apartment's owner, landlord or property managers.

However effective January 1, 2024, if you are receiving a government subsidy for rent assistance, California Senate Bill 267 prohibits a person’s credit history being used as part of the application process for a rental accommodation without offering the applicant the option of providing verifiable alternative evidence of the applicant’s reasonable ability to pay the non-subsidized portion of the rent.
 
Read on to learn more about the credit score for renting.

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What is Senate Bill 267?

As of January 1, 2024, California Senate Bill 267 makes it unlawful in instances in which there is a government rent subsidy, to do either of the following:
 
(A) Use a financial or income standard in assessing eligibility for the rental of housing that is not based on the portion of the rent to be paid by the tenant.
(B) (i) Use a person’s credit history as part of the application process for a rental accommodation without offering the applicant the option, at the applicant’s discretion, of providing lawful, verifiable alternative evidence of the applicant’s reasonable ability to pay the portion of the rent to be paid by the tenant, including, but not limited to, government benefit payments, pay records, and bank statements.
(ii) If the applicant elects to provide lawful, verifiable alternative evidence of the applicant’s reasonable ability to pay pursuant to clause (i), the housing provider shall do both of the following:
 
1) Provide the applicant reasonable time to respond with that alternative evidence.
2) Reasonably consider that alternative evidence in lieu of the person’s credit history in determining whether to offer the rental accommodation to the applicant.

What does Senate Bill 267 Change?

Typically, an individual who is applying to rent an apartment is required by the landlord or property management company to agree to a check of their credit score and credit history. They do this to see if the applicant has the required minimum credit score to rent an apartment. Although credit score and credit history requirements vary depending on the criteria of the property owner, most people agree to these terms as part of their application process.
 
With the implementation of Senate Bill 267, landlords can no longer use credit history as a deciding factor in approving or denying a rental application if the tenant has a government subsidy. As stated in the Senate bill language, landlords must offer alternative ways for a prospective tenant to demonstrate their financial responsibility and their ability to pay their portion of the rent.
 
When making calls during your apartment search, you may ask, "do you need credit to rent an apartment and the minimum credit score to rent apartment?"

Who does Senate Bill 267 Affect?

Senate Bill 267 affects individuals receiving government rent subsidies.
 
It prohibits the use of a person’s credit history as part of the application process for a rental housing accommodation without offering the applicant the option of providing lawful, verifiable alternative evidence of the applicant’s reasonable ability to pay the portion of the rent to be paid by the tenant. Additionally, the bill requires the housing provider to give the applicant reasonable time to respond with that alternative evidence and reasonably consider that alternative evidence in lieu of the person’s credit history in determining whether to offer the rental accommodation to the applicant.

What can be used in place of your credit history?

Proof of the following may be used in lieu of showing a credit history:

• Government benefit payment records
• Pay stubs or pay records
• Bank statements
• Other verifiable documentation of income and financial standing

Why was Senate Bill 267 passed?

According to Senate documents, this bill was proposed as a tool to reduce homelessness. "Multiple factors currently limit the effectiveness of subsidized housing vouchers as a tool for combatting homelessness...For one thing, many landlords refuse even to consider tenants if the tenants have vouchers."
 
Additionally, people who are homeless or those with poor credit or no credit history are essentially blocked from finding housing due to credit history requirements. This bill creates a pathway for people who receive government benefits to have the ability to attain rental housing.

Do you need credit to rent an apartment in other states?

Typically, a check of a person's credit history and credit score for renting are required, particularly at commercial apartment buildings.
 
Some real estate agents may want to run a credit check before they start helping you search for an apartment. Regardless of what state you live in, you have the right to decline a credit check.
 
If you do not want to undergo a credit check, you may be able to find an apartment in a private home. Renting with one or more roommates could be an option if you know someone with good credit who is willing to have their credit checked, or perhaps already has a house or apartment with a room for rent. Letters of recommendation from family and friends could provide a landlord with assurance that you'll be a good tenant.

FICO uses five categories to calculate credit scores

The most widely used credit scores are FICO scores, which were developed by Fair Isaac Company, Inc. A FICO score will fall between 350 (high risk) and 850 (low risk). Calculating a credit score is based on these five categories, and the percentages in the parentheses reflect how much each category counts toward the score.
 
Payment history (35%). The most important factor in a FICO Score is based on on-time payments of debt related to credit cards, mortgages, car loans, student loans, medical bills, and other personal debt.
 
Amounts owed/Credit utilization (30%). If you are using a lot of your available credit, this may indicate that you are overextended, which could reduce your score.
 
Length of credit history (15%). The longer you have had credit accounts, such as a credit card, the higher your score will be.
 
Credit mix (10%). FICO Scores will consider your mix of credit cards, retail accounts, installment loans, finance company accounts, and mortgage loans.
 
New credit (10%). Opening several new credit accounts in a short amount of time represents a greater risk and can reduce your score.
 

What's the minimum credit score required to rent an apartment outside of California?

The average credit score for approved apartment rental applicants is around 650.

Can I rent an apartment with less-than-ideal credit?

It may be possible to rent an apartment with less-than-ideal credit. If you are not exempt from a credit history check by California Senate Bill 267, it's a good idea to take steps to improve your credit score before applying, so you can meet the minimum credit score to rent an apartment. 

How to improve credit score

Here are seven ways to improve your credit score:

1. Pay your bills on time

This one factor can make or break your credit score. A creditor can report your late payment to the credit bureaus (Experian, Equifax and TransUnion) once you're 30 days late, and the late payment can remain on your credit reports for up to seven years.

2. Pay off debt and keep credit card balances low

Paying off your credit card balances each month can increase your credit score because it lowers your credit utilization ratio. Utilization, the amount of available credit you're using, is the second most important factor in credit scores. If you must, carry a balance keep it as low as you can.

3. Open new credit accounts only as needed

When you apply for a credit card the card issuer will run a hard inquiry of your credit score and you may see a small drop in your credit score. You score will increase when you pay our monthly bill on-time and in-full. According to the Credit Reporting Agency Experian, a hard inquiry will stay on your credit report for two years, however, the inquiry will only affect your credit score for one year at most.

4. Don't close unused credit cards

Never closing a credit card for the sole purpose of raising your FICO Score. Closing an old or unused card means you are essentially wiping away some of your available credit which would increase your credit utilization ratio, and negatively affect your credit score.

5. Dispute inaccuracies on your credit reports

Under federal law, you are entitled to a free copy of your credit report once every 12 months from each Credit Reporting Agency (Credit Bureau). If you find an error on your credit report, you have a right to dispute the inaccuracy. There is no fee to dispute errors or remove outdated information, and you don’t need to hire a credit repair company to do this for you. Correcting inaccuracies can add points to your credit score. To request your credit report, visit www.AnnualCreditReport.com.

6. Increase your credit limits

While it may seem counterintuitive to increase your credit limit while you are trying to decrease debt and restore credit, a higher credit limit can lower your overall credit utilization ratio, making your credit score increase.

7. Use credit monitoring to check Your progress

Credit monitoring and credit score monitoring provides 24/7 monitoring of your credit score and can alert you to possible fraud and identity theft.

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