For one reason or another, you may find yourself having trouble renting an apartment on your own. This is a common problem for young people moving out on their own for the first time, as well as those who have endured a bout of financial difficulty and are working to get back on their feet. For whatever reason, you may find your rental application denied on the basis of your credit history.
Don’t worry, though, this doesn’t mean you’ll be unable to get an apartment. You have options, including finding a cosigner. To better understand the implications of using a cosigner, contact the lawyers at Adam Leitman Bailey, P.C. for advice.
What is a Cosigner?
A cosigner is a form of guarantor, or someone who vouches for you as a tenant by saying that they’ll stand in and pay your rent if you don’t. This doesn’t mean that they have to live with you, though. A cosigner is undertaking financial liability, not an ownership or occupancy right in the property.
Almost anyone can cosign your lease, as long as they are willing to do so and have the financial health to back up their promise. However, because your landlord still has to approve of your cosigner, you’ll want to be sure to pick someone that is likely to satisfy their requirements. Relatives will usually be willing to cosign given your familial bond. Close friends may be an option too, although this is a bit more of a long shot. In either case, be careful – entering into this sort of financial entanglement with a loved one has the potential to strain the relationship and lead to disagreements down the road.
Why do You Need a Cosigner?
You’ll know you need a cosigner because your landlord will tell you directly when you apply for an apartment. The leading culprit in causing people to require cosigners is a less-than-stellar credit score. If your credit score is low, either because of a spotty credit history or little credit history at all, your landlord will want the added security of a cosigner before offering you a unit. A landlord may also request a cosigner if you have low income, are unemployed, or have a shallow work history. Finally, fair or not, young adults and recent college graduates are considered a higher-risk group by landlords and are more frequently required to obtain cosigners.
What if you can’t Find a Cosigner?
What if you don’t know anyone with the finances to vouch for you? Sometimes you can obviate the need for a cosigner by paying a higher security deposit up front. If the landlord insists on a cosigner, though, you will have to move on and find another apartment where, hopefully, you won’t need anyone to cosign. Before you go, though, ask the landlord why they wouldn’t let you rent without a cosigner. They’ll often tell you, and this will let you know what you need to work on to avoid this issue in the future.
If you found the apartment of your dreams and can’t find the cosigner you need, then you could use a cosigner service. Cosigner services are companies that guarantee to pay your rent if you can’t pay it yourself. However, this service is offered for a fee. Typically, you’ll pay a fee equal to a portion of your monthly rent to the cosigner service every month, even if you’re not behind on your rent. On top of this, you are required to repay any amounts that the cosigner service pays when you do fall behind on rent.
What if Your Cosigner Wants Out?
Sometimes a cosigner wants to back out of guaranteeing your rent. Usually, the law requires the cosigner to stand by their promise for the duration of the lease term. However, if all parties (including the landlord) consent to it, a cosigner can be relieved early. This will be more likely if you’ve demonstrated your dependability as a tenant up to this point, usually by consistently paying rent on time, improving your credit, or holding down the same job.
No one wants to be told they can’t rent an apartment on their own. Don’t let it get you down, though. If you have someone in your life who would be willing to cosign for you, then you can still get the apartment of your dreams. This could serve as a great opportunity to bolster your credit and job history, too, so that you don’t need a cosigner in the future. Of course, even if there’s no specific person you can count on to cosign, there’s always a cosigner service, if the landlord approves.