When you move to the U.S., it can be difficult to rent an apartment because most landlords will require a U.S. credit check as part of your rental application. Without a U.S. credit history, landlords may request large security deposits or reject your application altogether, especially in large cities where demand for apartments outweighs supply.
Fortunately there are several ways to rent an apartment without a credit check, including finding a “guarantor” who will sign onto your lease.
This article dives into what a guarantor is and why you may need one when applying for an apartment, so that you can qualify for your dream apartment here in the U.S.
What is a guarantor?
A guarantor is a responsible third party that signs on to a loan and agrees to take on the responsibility of fulfilling financial obligations on behalf of another individual if they are unable to do so.
Sometimes also called a “co-signer”, the guarantor serves as a backup or security for lenders and landlords, reducing the risk associated with providing financial assistance to someone with limited credit history or a higher perceived risk.
In the context of applying for an apartment, a guarantor agrees to “take on” the obligations set forth under the lease (i.e. paying rent and fees) if you as the renter are unable to do so. This can be a parent, relative, employer, or anyone else who has an established credit history in the U.S.
When does a renter need a guarantor?
When applying for an apartment, a landlord or property manager will typically ask for a credit report, a background check, proof of income and/or employment and even past references to ensure you are a reliable tenant.
There are many situations that landlords may also ask for a guarantor, depending on your location, financial situation, and credit history.
Here are some of the most common reasons:
No U.S. credit score (i.e. non-U.S. resident, student, or otherwise new to credit)
Poor credit score
Limited available funds or inability to pay security deposit
Unconventional or inconsistent source of income (i.e. gig work)
Perceived failure to meet any of the qualification standards or fulfill rent obligations — sometimes this is subjective based on the landlord or building’s policies, while other times this is due to qualification standards commonly accepted in a certain city.
What are qualification standards?
Qualification standards are simply the minimum requirements a renter must meet, usually set by the landlord or property manager, to get approved in a certain building. These can differ drastically from city to city and even from landlord to landlord. Each situation is unique and based on vacancy rates as well as the chance of default, depending on the landlord’s requirements.
In New York City, for instance, property managers require prospective renters to make 40x the monthly rent in gross annual income. In the event a renter fails to meet that requirement, the most common solution is to turn to a third-party guarantor.
Guarantors in New York are usually required to provide documentation showing they have enough cash liquidity (usually 80x the rent) and willingness to cover the renter upon default. If these requirements are met, business as usual.
While New York is a particularly expensive market, several other cities have similar standards. Before moving to a city, do some research on common income requirements for renters or their guarantors.
How to find a guarantor
As you kick off your apartment hunt in the United States, make sure to understand the specific requirements of your landlord, building, or city. If you find a unit you’re interested in, make sure to check with an apartment’s leasing agent if they will accept a guarantor on your application.
Our U.S. Arrival Map has several common apartment listing platforms in the ‘Relocation’ to help you kickstart your search. You can also read our top tips for internationals renting in the U.S. to further guide your process.
In order to find a guarantor, consider trusted individuals in your life who have a strong, established U.S. credit history, high income, and/or significant cash liquidity. This could be a parent, another relative, or a trusted colleague. Depending on the landlord, they often do not even need to live in the U.S.—as long as they meet certain credit, income, and/or asset requirements.
If no one comes to mind, there are also fintech companies such as TheGuarantors and Jetty that may be able to help. TheGuarantors, for instance, use an in-depth underwriting process that examines each candidate and their unique risk profile. After completing the online application, the renter pays a small premium (which is usually less than one month’s rent) to secure a third-party guarantee from the platform.
Once you’ve locked in your first apartment, explore whether you can report your rent to the credit bureaus to speed up the process of building your U.S. credit history. This will help make it easier to get access to other credit products in the U.S.—like credit cards, personal loans, and mortgages—and hopefully prevent the need for another guarantor down the line.
Use your foreign credit history to start your U.S credit history
New to the U.S.? Check if you can use your country's credit history in the U.S. to apply for credit cards and start your U.S credit history using Nova Credit.
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