Budget, Rent, and Credit

Before beginning your search for off-campus housing, it is important to determine your housing budget and target rent.

Budgeting and Financial Preparation

Resources

Budget

Your Financial Wellness: Financial stress is one of the leading causes for students’ disengagement from campus life. It compromises your ability to focus in the classroom and negatively affects your mental and physical health. Thus, it is important that you learn to manage your finances. The good news is that you do not have to do it alone. You can schedule an appointment with Drey at rochaa@usfca.edu staff to discuss your financial wellness: budgeting & saving, smart spending, building and establishing credit, emotional spending, etc.

Being Financially Prepared

Most landlords require one month's rent plus a security deposit (usually equal to around one month's rent) upon signing the lease. Moreover, you will likely need additional cash to cover moving expenses and utilities (power, telephone, etc.). For customers who have no credit or poor credit, utility companies like PG&E often require a deposit in order to start service. You should plan on having enough money to cover all of these expenses as well as a reserve amount for unforeseen expenses. Check out our many budgeting resources on this page!

Funding the Housing Search

This resource offers a list of things to consider in your list of costs for Funding the Housing Search [PDF]

28% Rule

Many landlords recommend that tenants budget 25-30% of their gross income for rent. Plan on using 28% as a general rule. Since most students can't meet this rule, they'll need a co-signer. A co-signer is a person who will co-sign an apartment lease alongside a tenant, guaranteeing to pay the rent if the tenant fails to do so. The guarantor is usually a parent, family member, or close friend who is willing to be legally responsible for the rental apartment.

Start determining your target rent now by downloading the Monthly Income and Target Rent worksheet [PDF].

Learn more about co-signers on the Co-Signer and Guarantor page

What is a Credit Report and Credit Score?

A credit report is a document that lists a person's debts and history of borrowing and repayment. A credit score is a measure of the person's overall creditworthiness. A credit report and/or score are used by a landlord to judge a tenant's financial reliability in making monthly payments. Therefore, having a good credit report and score is very important in securing a property.

What if I don't have a credit score?

Find an independently-owned property. Most real estate agencies will judge you heavily based on your credit score. Independent owners are often more flexible.

A credit report and credit score are established by incurring and repaying debt. For example, opening a credit card account, buying a car, or receiving a student loan are all ways to start building your credit history.

Because many students do not have any credit accounts (e.g. credit cards, mortgages, loans), they do not yet have a credit history or credit score. In this case, you should consider preparing a Renter's Resume and Supplemental Packet to optimize your chance of securing a property.

Landlords & Credit Reports

Landlords will often want to view your credit report and/or credit score as part of the application process.

By federal law, you are entitled to one free credit report from each of the three major credit bureaus each year. A good strategy is to bring copies of that free credit report when viewing properties, so that you are prepared to give it to landlord with the rental application. For more information on free credit reports, go to reviews.com, www.ftc.gov, or www.annualcreditreport.com.

Some landlords prefer to collect a fee from you for the purchase of the credit report. California law stipulates that landlords can collect a maximum fee of $30 for a credit report. The landlord must also provide a receipt that itemizes how the money is spent on the report, give the applicant a copy of the credit report if requested, refund any unspent portion of the fee, and return the entire fee is a background check is not performed.

Before agreeing to pay a credit report fee, you should ask the following questions:

Will the fee be applied to the first month's rent if your credit is positive and the landlord selects you as a tenant?
Will the fee be returned to you if the credit is positive but the landlord rents to somebody else?
How long will the process take to check your the credit report?
Is your fee refundable if the credit check takes too long and you are forced to rent another place?

If you decide to pay the credit report fee, any terms regarding a refund or credit should be in writing. This will help avoid any potential disagreement with the landlord about a refund.

INTERNATIONAL STUDENTS AND CREDIT

Without a U.S. Social Security Number it is impossible to obtain a credit report from a U.S. credit bureau. Many landlords may be adverse to accepting tenants who cannot provide a U.S. credit report. Therefore, international students are advised to prepare additional documentation of financial resources (scholarships, bank account funds, etc.) as part of a Supplemental Packet.

The International Student and Scholar Services Office (ISSS) is a great resource to speak with about any VISA or admission concerns. Please contact the International Student and Scholar Services Office at isss@usfca.edu.

OCL Quick TIPS for International Students who don't have a credit report or co-signer:

Be very personable and demonstrate you are highly responsible. For example, show up on time for a call or respond to emails promptly.
Explain while you do not have a co-signer or credit score you will:
- 1) Offer a vendor letter: showing you financial commitment to USF and that you have met this commitment as well as have an up-to-date VISA. You may contact the International Student and Scholar Services Office at isss@usfca.edu to learn more. Visit their Letters of Verification page to see their various letters of support.
- 2) Offer a renter's resume which shows a little bit about yourself.
- 3) If you are willing to show your bank account, offer to provide a copy to show there are sufficient funds which will demonstrate that you have the money to pay rent. Remember to remove any sensitive information like account number first.
- 4) If you are willing and have verified this is not a scam situation. Then you may offer to pay more of a deposit or offer to pay more of the rent upfront. For example, offer to pay double the deposit or offer to pay 3 months of rent at a time, meaning you would pay quarterly.

The main issue the landlord has is being unsure that you will pay the rent owed for the length of the lease. Therefore, if you demonstrate you are a serious renter then this will help greatly.

Please however make very sure that you can indeed pay the rent before you apply for the space. If you can not honor your contractual obligations and the landlord starts small claims court proceedings it may have an impact on your VISA status.

Need a cosigner?

You can have a parent or guardian cosign on your lease. That means that if you are unable to make your monthly payments, your cosigner would be financially responsible. If you and anyone else your co-signer signs for makes rent on time, this person will have no financial responsibility during the lease term.

Having a cosigner is a favorable indication to the landlord that you are reliable as a potential tenant, especially for students or people who can't meet the '28% rule' on their own.

Refusal to Rent

A landlord will usually not give you a reason for refusing to rent to you. However, if the landlord tells you that the decision is based on a negative report from a credit bureau or credit reporting agency, ask the landlord to give you the name of the credit bureau so that you may check the accuracy of the report and correct any possible errors.