What Credit Score Do You Need For an Apartment in Austin?

Moving to Austin and need a place to live?

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Well, the housing market here is very competitive, so getting a good deal on an apartment or favorable terms on a home loan depends on having a good credit score. 

This article will provide a picture of the Austin home market, what kind of credit score you might need to get a place you’ll love, and how you can get help from credit repair in Austin, Texas if you need it.

Current Housing Market in Austin

Since the end of the pandemic, real estate prices have soared everywhere and there is fierce competition for buyers and renters alike. The real estate market in Austin is no exception, and it ranks as one of the most popular in the country. According to Zillow, median home price in Austin in August 2022 was $650,000, with prices rising 16% year over year. Most experts expect that growth to continue, albeit more slowly, over the next year.

Because of a thriving job market, values for homes in Austin continue to grow. While this trend is the same for many major metropolitan areas, Austin is one of the strongest; although there is a slight slowing in the market, homes still sell quickly–after about forty days on the market, on average. Last year, the average time a home spent on the market before selling was thirty-three days.

One of the major driving factors in the Austin housing market is the incredible population growth, as it consistently ranks as one of the best places to live in the United States. Another factor that drives up value in Austin is the supply-to-demand ratio compared to other Texas cities. By all reports, the Austin area still has far greater demand for homes than supply.

How Affordable Are Austin Apartments?

With a growing population and a booming economy, it’s no surprise that homebuyers and apartment hunters are concerned about affordable housing. Although home prices in Austin will likely continue to climb, many experts say Austin is still one of the more affordable places when compared to more saturated markets like San Diego and Seattle.

Still, experts advise that if you’re planning on relocating to Austin, your work will be cut out because there is a high demand and low inventory. The competition for housing is fierce, so it’s advised that you start looking for a house or apartment as soon as possible to give yourself plenty of time to find the right place at the right price. 

Because homes do not sit on the market long in Austin, deciding to wait or think about it may mean losing a property to someone else who’s ready to buy. Lastly, take advantage of low mortgage rates–they have inched up recently, but they are still historically low rates. To get low rates, you’ll need a good credit score.

What Credit Score Do You Need For a Home in Austin?

If you’re looking for a home, you must examine your credit score before you apply for a loan. Your credit score is a significant determinant factor in whether or not you get a loan and what terms you get with interest rates. The higher your score, the more favorable terms you’ll get, and the lower the down payment you’ll need.

While there are a variety of home loans you can apply for, in general, the average credit score for Texas first-time home buyers is 671, according to Credit Karma. However, the credit score you need depends on the type of loan you’re applying for. 

For example, with the Federal Housing Administration, you may be able to get that loan with a score of 580 or above. A Veterans Administration loan can be secured with a score of 620 or more, a U.S. Department of Agriculture rural development loan can be obtained with a score of 640 or above, and a conventional loan can usually be made with a score of 620 or above. 

Having a high credit score will help you reduce total loan costs; FICO and Vantage are the two most popular services used to obtain a credit score. You may wonder which is better when it comes to FICO versus Vantage the answer is that they do the same thing, just slightly differently.

What Should My Credit Score Be if I’m Renting?

If you’re interested in renting an apartment, your score is still important, but not as much as when you’re getting a loan. Most people or companies renting out apartments will expect you to have a score of 620 or higher. However, because Austin is a hot market with high demand, rental companies and landlords may want to see scores over 700.

While landlords differ in what they look for, they generally want to know about your income and credit history to show that you have the money to pay your rent and are responsible for making your payments on time. Just like a low score may get you denied for a home loan, a low score could also cause you to be turned down for an apartment.

Because your credit score is so important when renting or buying, you must improve your score if it’s not where you want it to be before you go out looking for a place to live. The best way to improve a low score is to make all your payments on time and pay off your debt as quickly as possible. If you need help, contact a reliable credit repair company like The Phenix Group to help you get back on track and into the home of your dreams.

Minimum Credit Score for Renting an Apartment in Austin

The minimum credit score to get an apartment depends on various factors, such as your local rental market and whether or not you want to rent a luxury apartment. None of that matters if you have a splendid credit score–the average credit score you’ll need to approve a rental application is 650, whereas the average credit score that gets rejected is 538 or lower.

To get approved for a high-end building, you’ll need a credit score of around 683; anything less than 560 is sure to be rejected. A rule of thumb is that the more high-end the building and the more competitive the market, the higher score you’ll need, but the best way to know is to ask potential landlords what they are looking for in terms of a credit rating.

Options For Renting Apartment With a Low Credit Score

Not everyone’s going to have an excellent credit score. In case you don’t have a perfect record, there are a few ways you can rent an apartment with a low credit score:

- Rental Payment Proofs

If you’re struggling with your credit score, you can show your landlord proof of your previous rental payments made over the last six months. Make sure those were on-time payments and that the evidence you are showing is in the form of bank statements.

- Recommendation Letter

Another way to get approved is to have a recommendation letter from your previous landlord. It should state what a great tenant you were and that you always paid the rent in time. Although this probably won’t be enough to get you an apartment, it can improve your chances. You can even ask your employer for a reference letter if you have never rented an apartment before.

- Get a Lease Guarantor

If you have a low credit score, find someone to act as your lease guarantor. A lease guarantor is a person who will cosign an apartment lease with a tenant, guaranteeing that he’ll pay if the tenant fails to. Your landlord will ask many questions about your guarantor's financial details if you go this route.

Ways To Improve Your Credit Score

Building credit scores can be a long and tedious process. You can, however, take some steps to accelerate the process. 

Apply For a Credit Card

Getting a credit card is a great way to improve your credit score. If this is your first credit card, then get an entry-level card that doesn’t have any annual fees. Use it to pay all your bills, but don’t use more than 30% of the available credit. 

Increase Your Credit Limit

Improving your credit score will depend on your credit card usage. With a higher limit, you can spend more and improve your credit score.

In Conclusion

Good credit scores are crucial for getting a good apartment in Austin. So, regularly monitor your credit score and try to improve it. Having a good credit score also ensures you’ll get a good interest rate if you are in the market to purchase a home.

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