Renting your apartment can feel exciting. However, the overall approval process can feel stressful. If your income doesn't meet the landlord's requirements, you will have a difficult time getting that approval. That's where you will need a guarantor. Whether you are a first-time renter, a student, or someone rebuilding finances, you will need a guarantor. Read on, and let's explore more about how a guarantor can help with getting that approval.
How Rental Agreements Work When Additional Financial Support Is Needed
Landlords always screen tenants before renting out their properties. They check your credit score, income, employment history, and rental history. Most landlords require tenants to make at least two or three times the monthly rent. If you’re lacking in any of these criteria, a landlord can outright deny you or request additional financial support.
That’s where a guarantor comes in. By adding a guarantor to your lease, they are signing a legal document agreeing to pay rent if you don’t. The guarantor doesn’t live in the unit, but they guarantee that the landlord can collect rent from someone. It provides a safety net for the landlord so they can feel more comfortable approving your application.
The main difference between a guarantor and a cosigner is who is responsible for the rent. A co-signer is just as responsible for rent as you are from day one. A guarantor only becomes responsible if you fail to pay or default on the lease. It's an important difference that makes your guarantor an emergency backup, as opposed to a borrower.
Your landlord may also require the guarantor to provide financial documentation. This can include proof of income, recent pay stubs, bank statements, and authorization for a credit check. Some landlords even require a guarantor to live in the same state as the rental. Landlords all have different rules, so make sure to ask them up front what's needed.
What Is A Guarantor On A Lease and Why Landlords Require One
Understanding what a guarantor on a lease is can help renters with limited credit or income qualify for housing by adding extra financial security for landlords. A lease guarantor is someone who signs a legal document promising to pay your rent, fees, and any charges for damage to your property if you cannot or fail to do so. A lease guarantor does not live in your apartment, but they will be listed on your lease agreement for its full length.
Why would a landlord ask for a guarantor? Most of the time, it’s because something about your rental application doesn’t meet their requirements. These are the most common reasons:
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You have low credit or no credit - If you’re a first-time renter or a millennial just starting to build credit, your file may be empty.
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You don’t make enough money - Remember, most landlords want to see that you make at least 2–3x their monthly rent amount. If your income is too low, a guarantor with stronger earnings can make up the difference.
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You recently switched jobs - Income stability is heavily judged by how long you’ve been at your current job. If you just started working, your application will look risky even if you make bank.
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You have bad rental history - Evictions, or even being late on rent in the past, can stain your rental report. A guarantor will help take landlords off your back.
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You’re an international or student renter - If you don’t have a U.S.-based credit history, then landlords will likely want to see a guarantor.
If you skip a month's rent, they can immediately take legal action against your guarantor to recover the loss. There's no need for them to go after you in small claims court (where they may never see a penny). For that reason, renting to students and unemployed folks is much less stressful with a Guarantor in the mix.
Who Should I Put As My Guarantor and What to Consider Before Choosing
When deciding who to name as my guarantor, it's best to choose someone with strong credit, a stable income, and a reliable financial history. The search for a suitable guarantor is typically the most crucial step in your rental application. Family members and close friends are always the first places most people look when seeking a guarantor. Parents, other relatives, and trusted family friends are the most common choices. However, if they fail to meet the necessary credit and financial requirements, then they will not be able to act as your guarantor.
Most landlords require the following:
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Credit score of 700+
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Consistent, proven income. Most landlords want to see 2-3x’ the monthly rent.
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Little to no debt, and a clean financial history.
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Older than 21 and able to sign a contract.
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Owning a home.
If you have someone in mind to act as your guarantor, sit down with them and have an open discussion. Be upfront about what being a guarantor means and what they are liable for if something goes wrong. Share your budget with them and show them your proof of income and your rent payment plan. Assuring them that you will pay rent on time every month will make them feel more comfortable.
If you don't have family or friends who meet your landlord's requirements, don't stress. There are professional guarantors such as The Guarantors, Insurent, and Rhino that can help you for a fee. These companies typically cost between 4-10% of one year's rent. Keep in mind that not all landlords accept these companies. Make sure your landlord accepts these companies before you spend any money.
If providing a guarantor is just not possible, see if your landlord will accept one of the alternatives. You can always offer to pay a higher security deposit, pay several months of rent upfront, or apply with a roommate with good credit.
Final Words
A good lease guarantor could mean the difference between acceptance and rejection. Lease guarantors can help tenants live where they want while giving landlords confidence. You just need to find someone who has the financial means, understands what they're getting into, and cares enough about you to help. Just be honest, do your research, and treat the discussion as you would any agreement.
