As the name suggests, a guarantor is someone who guarantees that your rent will be paid each month. They'll be asked to co-sign your lease, which holds them responsible for rent payments in the event that you are unable to complete them.
In This Article
Who needs a guarantor
How much must a guarantor earn
Finding a guarantor
Renting with a guarantor
Apartment guarantor companies
Who needs a guarantor?
Generally, you’ll need a guarantor if your credit score or income is below a certain level. Most landlords require a credit score of 600 or above and an annual salary that’s at least 40 times the monthly rent. (A monthly salary that’s three times the monthly rent could work too, depending on where you live.)
You should also look into your options for getting a guarantor if you’re a first-time renter or are coming to the United States from a different country and looking for a place to live. If you freelance or have otherwise irregular income, you may need to use a guarantor—even if you have great credit.
How much does a guarantor need to earn?
Typically, a landlord’s guarantor requirements are stricter than the requirements for a regular tenant. A guarantor is expected to have a credit score of at least 700 (as opposed to the 600 minimum for a tenant). They are also required to make 80-100 times the monthly rent each year, even if they have a lot of assets in the bank. So, if you plan to apply for an apartment that costs $2,000 per month, your guarantor would need an annual income of at least $160,000.
A landlord may also ask that your guarantor live nearby so that it’s easier to collect rent from them if you default or disappear.
How do I find a guarantor?
Think of people you know who are in good financial standing and who you have a trusting relationship with. Most people go with a family member, but this won’t work if your parents or close relatives have poor credit or don’t make enough money. In this case, your employer may be willing to serve as your guarantor. As a last resort, consider any friends—or friends of friends—who meet the income minimum.
Serving as a guarantor is a risk with no upside, so you might need to coax your relative, employer, or friend into it. Prepare detailed and honest information about your financial status and your employment situation. You want to assure them that you will be able to make rent payments and that they definitely won't need to cover for you.
One way to do this is to prepare your rental application in full and show it to them, even before you've found a place. It should contain:
- Detailed information about your monthly income and expenses
- Records from any accounts you have open with financial institutions and proof of on-time payments
A thorough breakdown of your finances will help prove that you are not at risk of falling behind on rent—and make it more likely that someone will agree to guarantee your lease.
Renting with a guarantor
What does a guarantor need to provide during the approval process?
Once you’ve secured a guarantor, you’re ready for the rental application process. The landlord will ask your guarantor for the same kind of documents as a typical renter: bank statements, pay stubs, and tax returns. These can be sensitive documents—if your guarantor wants to send them directly to the landlord or management company instead of through you, that’s an option!
What is my guarantor responsible for once they’ve signed the lease?
A guarantor should always be given a copy of the lease they are signing. There will also be a separate guarantor agreement that is signed by the guarantor, the tenant, and the landlord. Make sure that the information in that agreement is accurate, including the monthly rent, start and end dates of the lease, and information on any other occupants.
If you miss a rent payment: Your landlord will contact your guarantor. If they can't get in touch with them or collect the rent, then you'll get evicted. The eviction will appear on the records of both you and your guarantor.
If the rent goes unpaid long-term: If neither you nor your guarantor pay the rent for months in a row, the landlord can also report the debt to a collection agency or take the issue to small claims court. If reported to a collection agency, the unpaid rent will damage your guarantor's credit score.
If your guarantor dies: The unpaid rent would be binding on your guarantor's estate—meaning that the debt is passed on to the person who inherits their wealth from them when they die.
If your guarantor wants to pull out: Until the lease runs out, your guarantor can only get out of their obligation with the landlord’s approval.
Can I hire a guarantor service?
If you want to keep family and friends out of it, you can always hire a company to guarantee your lease. The upside is obvious: you don’t have to ask your mom to put her savings on the line so you can snag your dream apartment.
However, there are downsides to this option. The first, of course, is the cost—you’ll get charged roughly one month of rent in order for the company to take on the risk. In addition, a guarantor service often doesn’t bolster your application in quite the same way a personal guarantor would. Typically, a personal guarantor overrides any issues your landlord might have with your income (and sometimes even your credit). Based on our experience, however, guarantor services don’t seem to have quite the same effect on a rental application.
There are several companies in the U.S. offering lease guarantee services, including:
- Insurent is currently available in New York, New Jersey, Massachusetts, Virginia, Maryland, Illinois, and Washington D.C. The cost varies depending on your financial status, but the fee is typically 75-110% of your monthly rental payment. In return, you'll be backed by a guarantor for one full year.
- TheGuarantors is available in 49 states and is priced between 35% and 85% of one month's rent. The cost is per lease, not per renter.
- Anchor Your Asset is available everywhere in the U.S. through partnerships with firms in each state. You're required to go through an application process in order to get a personalized rate.
The information provided on this website does not, and is not intended to, constitute legal advice.