Even if you don't pass a guarantor company screening, there's no need to give up. By understanding the main reasons for rejection and putting into practice multiple solutions—such as reapplying with a different guarantor company, utilizing a joint guarantor, or changing properties—your chances of successfully signing a rental agreement will expand significantly.
Reviewed by: Nobuyuki MoriPresident, M-Assets Co., Ltd. / Licensed Real Estate Transaction Specialist (Miyagi #018212)
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When signing a rental agreement, most properties require enrollment with a guarantor company. The guarantor company examines the tenant's ability to pay rent and refuses to provide guarantees if problems are identified. This "screening rejection" becomes a major obstacle preventing the tenant from moving forward with the rental agreement.
However, screening rejection does not mean "I will never be able to rent an apartment." There are multiple guarantor companies, each with their own unique examination standards. Even if you're rejected by Company A, it's not uncommon to pass with Company B. It's important to calmly analyze the cause and take appropriate action.
There are several typical reasons for screening rejection.
1. Credit Information Damage (Blacklist)
If payment defaults on credit cards or consumer loans, bankruptcy, or other negative items are recorded with credit information agencies (CIC, JICC), this becomes a significant negative factor in the examination. This information is generally maintained for 5 to 10 years.
2. Income and Employment Type Issues
Income falling short of 36 times the monthly rent (the "3x monthly income" rule), insufficient income verification as a freelancer or unemployed person, or unstable income from part-time or contract work—these are factors that make screening more stringent.
3. Past Delinquency History
If there is a history of rent payment delinquency with a previous guarantor company, your information may be registered in delinquency databases shared by organizations such as LICC (National Association of Housing Guarantee Companies) and LGO (Central Guarantee). Since multiple guarantor companies reference this information, screening becomes more difficult across the industry.
4. Nationality and Residence Status Issues
For foreign nationals, examinations may become stricter depending on nationality, residence status, and remaining length of stay.
Consult directly with the real estate agent and ask, "Can we change the guarantor company being used?" Many major guarantor companies—LICC-affiliated, LGO-affiliated, and independent operators—have different examination standards. If you're rejected by LICC-affiliated companies (members of the National Association of Housing Guarantee Companies), you may pass with independent operators such as Orico Forrent Insurance, Casa, or Nippon Insurance.
If you're concerned about passing the guarantor company screening, establishing a joint guarantor increases the likelihood of approval. It is generally required that the guarantor be a family member with stable income (parents, siblings, etc.). In recent years, many properties have eliminated the joint guarantor requirement, but it remains an effective option for some properties.
If you're a freelancer or self-employed, you can appeal to the strength of your income by submitting additional documents such as tax returns, income certificates bearing the tax office's official stamp, or proof of bank balance. This method is also effective if you can demonstrate significant savings as a backup.
Housing options that do not require guarantor company screening include UR Rental Properties (operated by the Urban Renaissance Agency) and public housing (municipal or prefectural). UR Rental requires no guarantor or guarantor company and allows you to move in if your monthly income meets a certain threshold. Also consider the Housing Acquisition Allowance Program and Housing Safety Net Registered Properties (low-rent properties utilizing disclosure-obligation properties).
By proposing to the property owner or management company that you "pay several months' rent in advance," it may be possible to sign a contract without a guarantor company. This is particularly likely in cases where the property has been vacant for an extended period, as the owner may be willing to accommodate.
If your credit information with CIC or JICC contains negative marks, the basic approach is to wait until that information is removed. Payment defaults are generally erased after 5 years, and bankruptcy records after 5 to 10 years. However, it's also important to make a disclosure request to confirm your own credit information and check for any errors. Both CIC and JICC allow you to request disclosure online through their websites.
To organize what you should do after being rejected by a guarantor company, the steps are as follows: (1) switch to a property that can use a different guarantor company, (2) establish a joint guarantor, (3) supplement your income with additional documents, (4) consider UR Rental, public housing, or support-provided housing, and (5) attempt advance payment negotiations.
The best strategy is to speak honestly with your real estate agent about your situation and ask, "Which guarantor company would be most likely to approve my application?" or "Are there other good property options available?" The more experienced the agent, the more tailored recommendations they will provide. While failing the guarantor company screening may feel negative, by knowing the correct countermeasures, you will definitely find a solution.
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