Moving into your first apartment = a major adulting achievement.
But before applying for your future spot, you’ll need to get a few things in order. And no, we don’t mean going down the Pinterest rabbit hole of new home décor.
Get together the three key numbers that matter to your financial health, so you can know how lenders may view you, and which apartments you can qualify for. Most Americans move between May and September, meaning it’s a pretty competitive space for renters. Turbo Tip: landlords predominately favor detailed, lease applications that showcase a complete picture of your financial health so they are confident in choosing the best applicant.
So in order to stay ahead of the competition (and set realistic apartment goals), here are the 3 key numbers you need to know.
Your credit score is a BIG factor landlords look at when considering your application. Your credit score is more than just a number—it represents how financially reliable you are and how well (or poorly) you manage your debt. Depending on where your score falls on the credit score scale (which runs between 300 and 850), this might be a make-or-break for your dream apartment. Not sure what your credit score is? It’s easy to get a free credit score report from Turbo!
If you’re working on improving your score or building credit for the first time, the good news is that many landlords accept co-signers. A co-signer is a person who is obligated to pay your rent if you can’t. If you plan on using a co-signer, make sure you know his/her credit score and have the #RealMoneyTalk on financial responsibilities before signing a lease.
With rent prices on the rise, landlords need proof to ensure you’re able to make the allocated payments each month. You can show proof of your verified income through bank statements, pay stubs, or job offer letters. Pro Tip: on average, housing often eats up 25-33% of your yearly net income. So before you set your rent pricing parameters on Zillow or Craigslist, be sure to do the math.
Debt-To-Income Ratio (DTI)
While not all landlords may ask for your DTI ratio, it is a key financial health indicator that shows if you’re living within your means. What is a good debt-to-income ratio? Lenders typically like to see 36% or less, but your landlord may have differing standards. You might be tempted, especially if you’re starting a new job, to upgrade your living arrangements and lifestyle to be in line with your increased income, but try to avoid this temptation at all costs!
Find a roommate to split the costs of housing, rent a cheaper apartment, or live in a less affluent area. If you can save even a hundred dollars a month on rent, that’s more money you can put towards paying off your debt.
Additionally, when submitting your application for a new apartment, renters may also ask for your ID (either your license or passport), Social Security Number, past rental history, a reference, and a check for the deposit (typically last month’s rent).
Now that you’re ready to rent, get your numbers with Turbo today so you can see where you truly stand financially. The Target household items section is waiting!