How to Rent Despite Bad Credit

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Jodi Furman, LiveFabuLESS.com
Jodi Furman, LiveFabuLESS.com(photo: Shoshana Ruttner)

Many landlords and rental companies will not lease a unit to anyone without doing a credit check. Most require applicants to have a credit score above 670 and a solid credit history, with no history of delinquency.

If you don't meet these standards, it will be challenging to find a place to rent. However, there are steps you can take and options you can exercise that will help you find a decent place to live.

Ehow asked Jodi Furman of the award-winning blog, LiveFabuLESS.com (Link below) to provide readers with on improving their credit.

Furman has taught millions of readers a modern and doable way to live an upscale life without the price through her blog and TV appearances. She has an MBA from Columbia Business School and is a married mom with three young kids plus two dogs and two cats.

Find a Place that Does Not Require a Credit Check

A number of large apartment complexes require a credit check from each and every potential renter. However, some small apartment buildings and many individual homeowners may just check your references if they check anything at all.

When you contact a potential landlord, ask what information she requires of her applicants. If that place does not require a credit check, that apartment or house should be at the top of your list.

Check Your Credit Score and Report

When you check your own credit score, it's considered a soft inquiry, which does not negatively affect your credit score. When a potential landlord checks your credit, it's considered a hard inquiry, which can lower your score. Checking your own credit also gives you an opportunity to identify and dispute any inaccuracies.

There is no truly free way to receive your actual credit score. All of those places that offer free credit scores only provide estimates, also called educational scores. Experian offers a check of all three scores for $40.

You can also get a free copy of your credit report from each of the three credit bureaus once every 12 months or after you've been declined credit. Credit reports contain all of the information that's used to compute the score, but do not contain the actual score.

Not all bad credit is created equal. If your score is low because of outstanding medical bills or student loan debt, those reasons are far less troublesome than if you have outstanding bills from utility companies, a bankruptcy or a history of defaults.

Do Housekeeping and Renovation on Your Credit Report

Review all of the sections on each of your three credit reports. If there are inaccuracies, dispute the information immediately. The credit bureau has to respond within 30 to 45 days. If it agrees that the information is inaccurate, or should it fail to respond, the information will be removed.

If your credit problems are in the past and not likely to recur, or if you have valid reasoning for your prior credit issues -- for example, job loss, medical issues, you can add a 100-word statement directly onto your credit report. Write a statement explaining your circumstances so any creditors, including potential landlords, will see it when they do a check.

One possible quick fix is to ask a more creditworthy friend or family member to add you as an authorized user on his oldest credit card. He does not have to give you access to the actual card. This can accomplish two things: it can lend their better history and score to you, and it can increase the average age of your accounts, both of which should increase your credit score. You can also take out a very small personal loan from a bank, and pay it back in full, demonstrating your creditworthiness. Do not close out accounts, even ones that you don't use, as that will lower your score.

FabuLESS tip: Cleaning up your credit report takes time. There are no instant fixes. Even if it's too late to fix your credit before you rent your next apartment, it's still worthwhile to do so now. This way, your credit won't be an issue when you look to rent the next time.

Get References

Many landlords will consider credit-challenged applicants with excellent references, a solid employment history, significant personal savings and other signs you are capable of paying your rent. Get written references from your current and past landlords, your current employer and your bank.

Pay Upfront

Landlords may look past a credit score if you pay upfront. Offer to put down a large security deposit or pay a few months rent in advance. If those options aren't within your means, allow your landlord to have your rent deducted automatically from your bank account.

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