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How to Rent a Home With Bad Credit

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Renting a house with bad credit can be a difficult thing to do because most property management companies and landlords require a credit check before renting to you.  Everyone knows the importance of a high credit score — something that can only be achieved by managing your credit responsibly over the long run, by always paying your bills on time, keeping your credit card balances as low as possible relative to your credit limits, and making sure you don’t apply for new credit too often.

But in today’s challenging times, many consumers — especially homeowners who have fallen behind on their mortgages or those who have already lost their homes to foreclosure — have seen their credit scores plummet.

For those jumping back into the rental market now, damaged credit will only add a thick layer of difficulty to an already challenging situation. Most landlords do a credit check in order to approve a potential tenant, so finding a place to rent with a low credit score is not going to be easy. That doesn’t mean having to move back in with family or crash on a friend’s couch, however. Here are four ways to overcome a bad credit score when house hunting.

Rent from an Individual

While most apartment complexes require a credit check to rent, individual landlords who are looking to rent their condo or townhouse may not perform a credit check — or may be willing to make an exception for a tenant with a bad credit score (for more on that, see our next suggestion).

Look for properties to rent on Craigslist, your local newspaper or even check with a local Realtor who specializes in rentals. Tell everyone you know that you are looking for a place to rent in case they know of a property available. When inquiring about a place to live, ask the landlord what is involved in the application process — instead of asking outright if there is a credit check. (That may send up a red flag and get the landlord to simply hang up the phone or stop replying to your emails.)

Explain Your Situation

If you are unable to find a place to rent that meets your needs without a credit check involved, consider explaining your situation to the landlord of your top choice. Since many people have poor credit these days, and often due to circumstances beyond their control, a landlord might be willing to rent to you if you can prove you will be able to pay your rent on time and show that the unfortunate credit events that damaged your score are in the past.

Write a letter detailing your situation and the reasons why the issues that caused your credit downfall are no longer relevant to your ability to pay rent. If your credit score is low because you had no job for a while, but you are currently employed, enclose a letter certifying your employment and copies of two or three of your latest pay stubs.

Or contact a previous landlord or roommate, and have them write a letter of recommendation for you, describing your payment history and vouching for your fiscal responsibility as a tenant.

Find a Roommate

Most apartment complexes require all tenants of a unit to undergo a credit check, but renting an apartment with a roommate or a single room in a house is a solution that may work in some situations. Because your share of the rent will be lower, a landlord may be more willing to accept a lower credit score, especially if your roommates have excellent credit.

Some apartment complexes allow one person to rent the unit and then sublease to roommates without adding them to the lease (and thus having them undergo a credit check).

The most important thing if you are going this route is to be upfront and honest about your situation with your potential roommates, so there are no surprises when going through the application process.

Find a Co-Signer

As a last resort, consider asking a family member or close friend to co-sign your lease. Keep in mind, this is a huge favor. You are asking them to assume financial responsibility for the apartment if you do not pay your rent. Only go this route if you are positive that you can afford to pay the rent without any issues and that the co-signing arrangement will not affect your relationship with the person, or their own credit rating.

Renting a house with bad credit is possible, try to follow these simple tips and you should be able to find a home that meets your needs.  Once you find your new home, make a conscious effort to always pay on time: your rent, as well as all other bills. With time, attention and fiscal responsibility, you can repair your credit so that next time your home search will be easier.

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