How to Handle a Co-Applicant With Bad Credit (5 Options)

TL;DR: A co-applicant with a credit score under 620 doesn't automatically disqualify a rental application, but you need a written, consistent screening policy before you decide anything. Common fixes include requiring a guarantor with a score above 700, collecting a higher security deposit (often 1.5 to 2x normal), or averaging household income against a 3x rent-to-income rule. Document whatever standard you use in writing, and apply it the same way to every applicant.

_Last reviewed: July 2026 · 7 min read_

Two people apply for your rental together. One has a 740 credit score and steady income. The other has a 560 and two collections accounts. Now what? This comes up constantly for owner-operators, and the wrong move — either rejecting outright or waving it through out of sympathy — can cost you rent, or worse, land you in a fair housing complaint.

Okoniq Property Hub helps you keep screening notes, applicant documents, and decision reasoning attached to each unit so you have a clean record if a denial is ever questioned.

What Is a Co-Applicant, and Why Does Their Credit Matter?

A co-applicant is anyone listed on the lease who's legally responsible for rent, not just an occupant. That means their credit score, income, and rental history get weighed the same as the primary applicant's, because they're on the hook for the full rent amount if the other person can't pay.

Most screening services (TransUnion SmartMove, RentPrep, Experian RentBureau) report each applicant's score separately, and landlords typically use the lower of the two scores as the household baseline unless they've set a different policy. A general benchmark: scores above 650 are considered acceptable risk by most rental screening guides, 620-650 is borderline, and anything under 580 usually signals recent missed payments or collections. These aren't legal thresholds, they're industry norms you should set in writing before you ever run a report.

Should You Automatically Reject an Application Over One Low Credit Score?

No, not without checking your own written policy first. Fair Housing law (enforced by HUD) doesn't require you to accept anyone, but it does require that you apply the same standard to every applicant regardless of protected class. If you reject a co-applicant's low score in one case but overlook it for another applicant, you're exposed to a discrimination claim even if that wasn't your intent.

Before rejecting, check three things: is the low score from an old debt (5+ years) versus a recent pattern, does the primary applicant's income alone cover 3x the rent, and does your written policy already spell out a remedy — like a guarantor or extra deposit — instead of an automatic denial. Many of the same discipline habits that matter here show up elsewhere in property management too, like documenting 5 foundation cracks that are serious versus cosmetic ones instead of guessing.

What Are Your Options When a Co-Applicant Has Bad Credit?

You have five realistic paths, and most experienced landlords use a combination rather than a flat yes/no.

| Option | What it requires | Typical terms | |---|---|---| | Add a guarantor | Third party (often a parent) signs the lease, agrees to cover rent if tenant defaults | Guarantor credit score usually 700+ and income 4-5x rent | | Raise the security deposit | Applicant pays more upfront instead of relying on credit alone | 1.5x to 2x standard deposit, check your state's cap | | Require prepaid rent | Applicant pays 2-3 months rent in advance | Legal in most states but check local rent-control rules | | Average household income | Combine both applicants' income against the 3x rent rule | Common when one applicant has strong income, weak credit | | Deny with written reason | State the specific screening criteria not met | Must match your published policy exactly |

A guarantor arrangement is usually the cleanest fix because it shifts the financial risk to someone with a stronger credit profile without changing who lives in the unit. Prepaid rent works well for self-employed applicants whose credit dipped due to inconsistent income rather than missed payments.

How Do You Document the Decision to Protect Yourself Legally?

Write down the specific reason for your decision and keep the screening report on file for at least three years, since that's the statute of limitations window for most Fair Housing complaints. Your denial letter (or approval-with-conditions letter) should cite the actual criteria — "credit score below our published minimum of 620" — not a vague statement like "didn't feel like a good fit."

If you're requiring a guarantor or higher deposit as a condition of approval rather than denying outright, put that in writing too, with the specific number and due date. This is the same instinct that protects you when you're tracking maintenance disputes: the same way you'd log dated photos before repairing 5 signs of a slab leak under your floor so there's no argument later about what existed before move-in, a dated screening file removes ambiguity about why you made the call you did.

What if the Co-Applicant Is a Guarantor Instead of a Co-Tenant?

A guarantor doesn't live in the unit and isn't named on the lease as a tenant, they just co-sign to guarantee rent payment, which changes what you should check. Focus almost entirely on the guarantor's income and credit, not their rental history, since they won't be occupying the property. Most landlords require guarantor income at 4-5x monthly rent (higher than the standard 3x for tenants) because they're covering the full obligation without living there to feel the consequences of missing rent firsthand.

Get the guarantor agreement notarized or at minimum signed with the same rigor as the lease itself, because an informal side agreement is hard to enforce if it ever goes to small claims court.

FAQ

Can I reject a rental application solely because a co-applicant has bad credit?

Yes, as long as your written screening policy applies the same credit threshold to every applicant, and you state the specific reason (not a vague explanation) in your denial notice.

What credit score is considered too low for a co-applicant?

There's no legal cutoff, but many landlords treat scores under 580 as high risk and 620-650 as borderline requiring extra conditions like a guarantor or higher deposit.

Does averaging credit scores between co-applicants make sense?

Most screening guides recommend using the lowest score in the household as the baseline rather than averaging, since either person can be individually responsible for the full rent.

How much extra deposit can I legally require for a weak co-applicant?

This varies by state, some cap total deposits at one or two months' rent regardless of credit, so check your state's landlord-tenant statute before requiring more than the standard amount.

Is it better to require a guarantor or just deny the application?

A guarantor is usually the better business decision if the primary applicant's income and rental history are otherwise strong, since it fills the unit while shifting the financial risk to someone with better credit.

This is educational information, not legal advice. Consult a local landlord-tenant attorney or your state's fair housing agency before finalizing a screening or denial policy.