Prove Your Financial Responsibility: What Is A Guarantor And How Do You Get One?

Prove Your Financial Responsibility: What Is A Guarantor And How Do You Get One?

When you’re first starting out, proving that you’re financially responsible can be a challenge. You don’t have a history of being responsible, so no one wants to trust you. But if no one trusts you, how can you prove that you’re responsible?

A Guarantor (Or Co-Signer) Can Vouch For Your Ability To Pay Rent

Sometimes, a landlord or landlady will sidestep this problem by asking you for a guarantor. Simply put, a guarantor, also known as a co-signer, is someone who pledges to make your payment if you don’t or can’t. Landlords often ask for guarantors if you have bad credit, have never rented before, are from out of the country, or simply don’t make enough money for them to feel comfortable that you can cover the rent. In New York City, where I’m a real estate agent, landlords often ask for an income of 40x monthly rent. So if you’re taking an apartment that rents for $1,500 a month, the landlord will want you to make $60,000 — or ask for a guarantor.

How To Get A Guarantor

Ask your landlords what criteria they’re looking for. If you’re in Chicago, and they’re looking for someone with a good credit history who lives in the same state, it’s not worth asking your parents in Florida. It doesn’t have to be someone related to you, so sometimes a friend of your parents will do it. If you’ve moved to a new place for a great new job, sometimes your employer will serve as your guarantor; ask your human resources department.

How To Be A Guarantor

You’ll sign a guaranty (sometimes spelled guarantee) clause on a lease—which will say something like “I guarantee full performance on the lease by Jane Doe—including payment of rent.” Since you’re on the hook if the tenant doesn’t perform, think twice before you do this. Could you afford the rent if you had to pay it? If you’re helping a family member get started, and you can cover them, I think it’s okay to guarantee a lease. But if your little sister asks you to guarantee her lease, she’s flighty, and you fear she might ruin your credit record, it’s okay to tell her you don’t want to be her guarantor… and ask her to find a cheaper apartment.

If The Lease Renews Automatically, Guarantee Usually Does, Too

If you’re in a situation where you just need to prove that you can make the payments—or you’re guaranteeing payments for someone who just needs to establish that she’s responsible—after six months or a year of on-time payments, ask for a new lease without a guarantee.

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