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Many landlords will only consider prospective tenants with decent credit scores. However, some private landlords who are eager to fill empty rentals quickly may advertise “no-credit-check” apartments. In other cases, smaller family-owned buildings just don’t have the same documentation requirements as bigger complexes handled by property managers or brokers. Even if the building you’re interested in does require a credit check, there may be ways to get around it.

If you have bad credit or no credit, we’ll explain all the ways you can still rent an apartment.

Are There No-Credit-Check Apartments?

A handful of landlords will rent an apartment without a credit check. However, apartment hunters should approach advertised “no-credit-check apartments” with caution. The term can sometimes be code for “these units are problematic,” or “this landlord is difficult,” or even “this is a scam.”

Sometimes, however, private landlords in smaller buildings just don’t see the need for credit checks. They don’t advertise this, but “for rent by owner” (or FRBO) listings can offer a clue.

Instead of pulling a credit report themselves, some landlords will accept a credit reference with the rental application. Credit reference documentation can be a recent credit report that the tenant provides (saving them from paying a fee), or pay stubs and W-2s, or letters from previous landlords or lenders — basically, anything that shows your ability to pay the rent.

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Why Landlords Perform Credit Checks

Landlords perform credit checks for apartment rentals for the same basic reason that employers run credit checks for employment: to help determine a prospect is financially responsible.

Landlords want tenants who pay their rent on time. By checking an applicant’s credit report, a landlord can see how reliably the person pays their bills and manages their credit. If someone has a history of late payments or outstanding debts, a landlord will think twice before renting to them.

When landlords run a credit check, it will be a soft credit inquiry, which won’t affect your credit score.

How the Process of No-Credit-Check Apartments Works

Depending on the landlord, the application process for a no-credit-check apartment can be pretty standard or very casual. Landlords generally ask for the following as part of your application:

•  Proof of identity

•  Proof of employment, income, or financial stability

•  Vehicle information, if parking is provided

•  Personal references

•  Application fee

Typically, it takes one to three days to process an application. Afterward, you’ll be given a lease to sign. At this time, you can negotiate the security deposit, move-in date, and any details such as minor repairs to be made. When you receive the keys, the place is yours.

Where To Find No Credit Check Apartments

You can find no-credit-check listings in print, online, or via signs on some buildings. No-credit-check apartments are usually not handled by a hired property manager or broker. Instead, they are managed by a private landlord (the building owner) who needs to have rent continually coming in to cover the costs on their property.

Some of these landlords are less particular about their prospective tenants. Others trust their instincts about people over credit and background checks. And others still, as noted above, just don’t want to deal with the hassle and fees associated with credit checks.

Tips for Renting an Apartment With No Credit

If you’re looking to rent an apartment (or house) but you have no credit or bad credit, here are some tried-and-true strategies.

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Be Honest

No one likes an unhappy surprise. If you haven’t established credit yet, say so. If you have credit problems, say so. Have a conversation with the landlord before you apply to gauge their flexibility and forewarn them of red flags in your credit history. Then include a cover letter with your application repeating your explanations. Glowing reference letters also help offset a poor credit score.

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Get a Roommate

Finding a roommate with good credit can help make the deal go through. A landlord may accept using their name alone on the lease (assuming the roommate is OK with taking full responsibility for rental payments). Or you may be able to put both your names on the lease.

Look for Sublets and Shares

Sometimes, a leaseholder will “sublet” their apartment while they pursue opportunities elsewhere. This allows them to return to their former home in the event they want to move back. Rather than paying rent to the landlord, the subletter will often pay the leaseholder, so financial documentation may not be required. This is a common arrangement in big cities, especially among leaseholders of rent-stabilized apartments.

In share situations, roommates who are on the lease may sublet an extra room without requiring much, if any, documentation. As long as you make a good impression, they may give you a chance.

Find a Cosigner

A cosigner is someone who promises the landlord to cover your rent if you cannot pay — usually a good friend or family member with great credit. Cosigners may or may not live in the apartment.

Pay a Higher Security Deposit

If you’re brainstorming how to rent an apartment with bad credit and no cosigner, consider laying some cash on the line. Putting down several months’ rent as a security deposit can reassure the landlord.

Show Financial Proof

Perhaps you make a decent income that will make it easy to pay your rent. Or you saved up some money as a cushion. Share proof with the landlord in the form of pay stubs and bank statements.

Use Previous Landlords as References

If you’ve rented from other landlords and made those payments on time, bring a reference letter or two to prove it. Ideally, the reference should be on letterhead or at least look neat and professional. That might mean creating the letter yourself and having your previous landlord sign it.

Promote Yourself

If you’re in sales, theater, or marketing, use your superior presentation skills to persuade your landlord what a great tenant you’ll make. Turn on the charm. Bring homemade baked goods. It works.

Build Your Credit History

If there’s somewhere you can stay for now — with a friend or family member — spend that time building your credit history. To build up poor credit, focus on paying bills on time, paying down credit card balances, etc. During this time, it may help to sign up for credit monitoring. What qualifies as credit monitoring varies by service, but look for one that offers alerts whenever your score changes.

When you have no credit, you can start to build your history by becoming an authorized user on a credit card or putting a utility in your name. Just be aware that it may take six months for the system to generate your credit score. You can find out your credit score for free from Experian, via AnnualCreditReport.com.

The credit score needed to rent an apartment varies by landlord, but the average required score is about 650.

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The Takeaway

If you haven’t yet established credit or have a problematic credit history, no-credit-check apartments are one option. However, there are many other ways to secure a rental, from finding a sublet or share situation to paying a higher security deposit. Beware of shady no-credit-check apartments: There’s no reason to settle for an unsafe or unhygienic environment just because of your credit score.

With SoFi’s free money tracker app, you can see all of your financial accounts on one mobile dashboard. Plus you’ll get free credit monitoring. Track your spending and savings to get a bird’s eye view of your finances.

FAQ

What happens if you don’t have credit but want to rent an apartment?

Let the landlord know up front and ask what you need to do to rent the apartment. Their suggestions may include getting a roommate or cosigner with good credit, or to put down a larger security deposit. If you’ve rented in the past and made payments on time, ask your previous landlords for reference letters and build a case about why you’ll make a great tenant.

Can I rent an apartment with collections?

If you’re planning to rent a no-credit-check apartment, then the landlord won’t consider issues on your credit report. If your credit will be checked, talk to the landlord up front to see if renting with collections on your report is somehow possible.

What’s the minimum score to rent an apartment?

It’s up to the individual landlord, although 650 is a general benchmark. If a landlord requires a “good” credit score, FICO considers that to be in the range of 670-739.

I’m wondering how to pay rent with a credit card, no fee. What can I do?

If you’re renting right now, ask your landlord. If you’ll be seeking an apartment to rent, ask prospective landlords if this is possible. Each landlord has their own policy about credit cards.

Photo credit: iStock/StefaNikolic

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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A stock market correction occurs when the market hits a new high, and then falls by at least 10%. A correction is similar to a dip or crash, but not as severe as a “bear market,” which is when the market sees a decline of 20%.

Stock market corrections are normal and it’s important to be aware of why they happen and what you might consider doing the next time the market sees a correction.

What Is a Market Correction?

A stock market correction happens when the market reaches a new interim high and then falls by 10%. Some other stock market terms for market downturns include dips or crashes, which may be temporary or quick drops in the market that don’t see the market fall past 10%.

Corrections vs Bear Markets

A bear market is a longer decline in the stock market, and refers to the market after it declines 20% from a previous high. These terms can also apply to individual stocks (“Stock X is in correction territory,” for example), but individual stocks can see much more volatility than the overall market.

The most severe stock market correction in history, in terms of points, happened in 2018, when the Dow declined 1,175 points in a single day. Previously the record had been a 777-point decline. However, the 2018 4.6% drop wasn’t the biggest decline in terms of percentage. In 1987, on a day called Black Monday, the Dow dropped by 22%. That would be equivalent to 5,300 points in today’s market.


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The Nature and Frequency of Market Corrections

Stock market corrections happen every once in a while. They are, in fact, a normal part of the market cycle — that’s important for investors to keep in mind, as it’s not unusual at all for the market to experience a correction.

How Common Are Market Corrections?

Dating back to the mid-1900s, stock market corrections have typically happened three to four times every year. Although it’s nerve-wracking every time, these corrections are a normal part of the market cycle, as mentioned.

Duration and Impact of Corrections

When a correction occurs, you will likely see the media speculate whether it’s a crash or a correction, how long the correction will last, and perhaps, if the economy is going into a recession. This speculation is just that — here is no way of knowing exactly how big a correction will be or how long it will last.

A stock market correction is not typically the cause of a recession, nor is it a predictor of a coming recession. Stock market corrections can be stressful for investors and companies, but they are not necessarily signs of a poor economy.

Although there is no way of predicting how long a market correction will last, you can look to past data as some indicator of possible trends. For example, since the 2008–09 financial crisis, the past four corrections have had an average decline of 15.3% over a time period of three and a half months.

Navigating Through Market Corrections

Given that market corrections are common, investors would do well to know how to handle them. That may or may not involve making any changes to your portfolio.

Preparing Your Investments for a Correction

Unless you exclusively own stocks in an S&P 500 index fund, your portfolio will perform differently from the overall market. When a stock market correction occurs, the percentage drop is generally referring to the performance of the S&P 500 index. This is an index of the largest U.S. companies in the stock market.

The stocks in your portfolio may fall in value more or less than the overall market. Some of your stocks may even go up in value. It’s important to remember that if your portfolio drops by a certain percentage, it will need to go up more than that percentage to recoup your losses.

Strategies for Investing During Corrections

Generally, a good rule of thumb is to stay invested through a market correction — or, stick to a buy-and-hold strategy. If, for example, someone sells off their stocks during a panic, they could see them go back up in value again in a few days or weeks. If anything, depending on your strategy and goals, you may want to consider buying stocks during a market correction, because prices will have lowered.

You could consider whether you have available funds you’d like to invest during a downturn, and decide if you want to purchase more shares of stocks you already own or if you want to find new stocks to buy. Diversifying the stocks in your portfolio may help you weather the storm of a market correction.

If you do choose to purchase stocks during a market correction, be aware that their value may continue to decline before it recovers again. There’s also no guarantee that it will.

Also remember that the market has bounced back from some severe corrections and crashes over the years. Corrections happen every year and can be healthy for the market.


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Identifying Causes and Signs of Market Corrections

There can be numerous reasons that the market experiences a correction. And they typically can’t be predicted with any real sense of accuracy.

Key Factors Leading to Corrections

Since so many things could potentially lead to a market correction, it’s hard to say with any certainty what, exactly, is or was the catalyst. But generally, things like rising prices (inflation), slow economic growth, bad or disappointing corporate earnings reports, or even surprising news — say, a war breaks out, or some sort of political upheaval takes place — can cause the market to see a steep decline into correction territory.

Can Market Corrections Be Predicted?

As mentioned, market corrections can’t really be predicted. While it’s almost certain that there will be corrections in the future, discerning when, exactly, they’ll happen is nearly impossible — nobody has a crystal ball.

Coping With Market Corrections as an Investor

Market corrections are going to happen — it’s a near certainty. But that doesn’t mean investors need to panic every time the market has a hiccup.

What to Do During a Market Correction

The first step in knowing what to do during a stock market correction is to find out why it’s happening — if possible. Next, look into your individual portfolio and see how it’s being affected by the correction. This will help you decide whether to buy, sell, or hold on to the stocks in your portfolio.

Remember that stock market corrections are normal. If you have a long-term investing strategy, you will likely see market corrections, bear markets, and recessions during your years of investing. Try to stay calm and reconsider decisions that might be made based on fear or panic. It may not help to obsess over the value of your portfolio on any particular day.

Long-term Strategies for Handling Market Volatility

In terms of handling market volatility over the long term, here are some things and overarching principles investors can try to incorporate into their investment strategy.

•   Have a plan: Blindly buying stocks and then getting upset when they fall in value isn’t ideal. Know what your goals are and plan for them. Even when the market corrects, you can still reach your goals for the year if you plan properly. If you’re investing money to use in just a few months versus for your retirement, your strategy may look very different.

•   Diversify: One way to protect yourself from significant market crashes is to spread out investments over different types of assets. This is called diversifying your portfolio, and this tactic may help lower your risk of losses while still exposing yourself to potential gains. You can diversify into many different types of investments, including bonds, real estate, commodities, and simply by holding cash.

•   Consider cashing out: Investors can be afraid to cash out of a particular stock because it may continue to rise in value. If you own a stock which has gone up significantly, you may want to cash out some of the investment and diversify it into other investments.

•   Keep risk tolerance in mind: If you are growing your portfolio for long-term use, you can likely handle a few ups and downs in the market cycle. However, if it causes you too much stress to see your portfolio go down in value a lot in one day, perhaps it’s better not having so much invested in stocks.

•   Don’t try to time the market: On the same note, selling off your investments because you think the market is going south may not be a great strategy. The stocks you’re holding may continue to go up in value, and even if they do crash, trying to time your reentry can be just as challenging as timing your exit.

•   Think long term: Day trading and short-term investing are risky. If you build a diversified portfolio which you plan to keep invested for a long time before using it, it may be able to withstand cycles in the market and still continue to grow.

Real-World Examples of Market Corrections

As noted, corrections are common. In fact, the S&P 500 entered correction territory three times during 2022. It also happened more than once in 2023, and as of writing, the most recent market correction occurred during October 2023, as the market slid for a few months after topping out at a previous high in July 2023.

In December 2023, the market rebounded, and was near all-time highs.

The Takeaway

Stock market corrections are when the market falls 10% from a previous high, and they’re common parts of the market cycle. As you build your portfolio and mentally prepare for the next stock market correction, remember that you are not alone. Market crashes, dips, and corrections are stressful for everyone, and there are tools and specialists to help you navigate them.

Working with an investment advisor may help you stay calm throughout economic cycles. Planning your portfolio for diversification and long-term growth may also help you ride the waves of the market.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

FAQ

What happens in a stock market correction?

During a stock market correction, the market slides at least 10% from a previous high due to any number of factors.

Are corrections good for the stock market?

Corrections can be good for the stock market in a similar way that a wildfire can be good for a forest — they can serve as a reset to valuations that may have gotten too high, and lower security prices for investors looking to deploy capital.

How long do stock market corrections last?

There’s no telling how long a correction could last, but it’s important to keep in mind that historically, the market has always bounced back given enough time.

What is the biggest stock market correction of all time?

The biggest drop in the S&P 500 in a single day was in October 1987, when the index fell more than 20% into a bear market.

How often should you expect a stock market correction?

Since the 1950s, the S&P 500 has experienced dozens of market corrections, and that means that one occurs less than every two years, on average.

How many corrections have there been throughout history?

In the modern era, since World War II, the stock market has experienced 24 market corrections, with an average market drop of more than 14%.

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