How tough is it to get a mortgage for a rental if your credit isn’t perfect?

Title: Getting Approved Isn’t Just About Numbers

I get where you’re coming from, but I’d actually push back a bit on the idea that reserves and cash flow always outweigh credit score. It’s true that lenders are looking at the bigger picture now, especially with investment properties, but I’ve seen plenty of files where a lower credit score still tripped things up—even with solid reserves. Some lenders just have hard minimums, no matter how much cash you’ve got stashed away.

Rental experience is another weird one. Some underwriters really dig into it, especially if you’re trying to use projected rental income to qualify. They’ll want to see a track record—tax returns showing rental income, leases, maybe even property management statements. Others barely mention it unless there’s something odd in your application. I had a client last year who was buying their first rental and the lender wanted a letter explaining how they planned to manage the place. Another time, someone with three rentals already didn’t get a single question about experience.

One thing I’d add: sometimes folks get hung up on the “cash flow” piece and forget that lenders define it differently than investors do. You might think your property cash flows great because you’re pocketing $300/month, but the lender might calculate it using a vacancy factor or only count 75% of the rent. That can throw people off.

Bottom line, there’s no one-size-fits-all answer. Lender overlays are all over the place right now. If your credit isn’t perfect but you’ve got strong reserves and some experience, you’ll probably have options—but don’t assume every lender will see it the same way. Always pays to shop around and ask questions before you get too deep into the process.

I hear you on the credit score thing. I thought having a decent down payment and some cash in the bank would make up for my not-so-great credit, but nope—the lender barely looked at anything else once they saw my score. It’s honestly kind of frustrating, especially since I know people with less money saved who got approved just because their credit was squeaky clean. I get that they need a baseline, but it feels like some of the other stuff should count for more. Shopping around definitely helped, though—some places were way stricter than others.

Title: How tough is it to get a mortgage for a rental if your credit isn’t perfect?

I’ve run into this with clients more times than I can count, and honestly, it’s one of the most frustrating parts of the process. There was this one couple I worked with last year—good income, solid down payment, even a little extra in reserves. But their credit had taken a hit after a medical thing a few years back. They figured the cash would balance it out, but the first two lenders basically shut the door as soon as they saw the score.

Here’s what I’ve seen work, step by step, for folks in that boat:

1. **Check your credit report for errors.** Sounds basic, but mistakes happen more than you’d think. One client found an old collection that wasn’t even theirs—got it removed, and their score jumped 40 points.

2. **Shop around, but be strategic.** Not all lenders weigh things the same. Some smaller banks or credit unions are more flexible, especially if you’ve got a relationship with them. The big guys tend to stick to their formulas.

3. **Consider non-traditional lenders, but read the fine print.** There are some out there who’ll look past a lower score if you’ve got strong assets or rental experience, but rates and fees can be higher. Sometimes it’s worth it, sometimes not.

4. **Be ready to explain.** If there’s a story behind the score—like a one-time event versus chronic issues—some underwriters will actually listen. Not always, but it’s worth a shot.

5. **Bigger down payment helps, but it’s not a magic fix.** I wish it was. Lenders still see credit as their main risk indicator, so even with 25% down, a low score can mean higher rates or flat-out denials.

It’s not fair, honestly. I’ve seen people with spotless credit and barely any savings get greenlit, while folks who’ve worked hard to save get sidelined because of a number. The system’s not perfect, but persistence and a little creativity can make a difference. Just gotta be ready for some hoops... and maybe a few headaches along the way.

Honestly, I get where you’re coming from, but I’ve actually had a different experience. My credit wasn’t great after a layoff a few years back, but I found a local credit union that was way more interested in my rental history and cash flow projections than my score. Rates weren’t amazing, but it worked out. Sometimes those smaller places really do look at the whole picture, not just the number. Maybe it’s luck of the draw, but I wouldn’t write off the possibility if your numbers aren’t perfect.

Had a client in a similar boat—credit wasn’t great, but she had solid rental income and a long history as a landlord.

“Sometimes those smaller places really do look at the whole picture, not just the number.”