How to Rent After Bankruptcy & Foreclosure

The safe exit to foreclosure

A downside risk of losing your home to foreclosure is the possibility that you may not be able to find suitable rental housing after the foreclosure sale has been completed and you are forced to vacate the house. This risk is usually an indirect result of the damage to your FICO credit score and the negative information contained in your credit report that appears as a consequence of the a foreclosure and possible bankruptcy filing that was done to stop the foreclosure. With a mapped strategy, this damage can be minimized, through a carefully executed plan designed to convince potential landlords that today you are a better credit risk as the result of no longer being responsible for making a mortgage payment that was greater than you could afford.

Things You'll Need

• Pre- and post-foreclosure credit reports and FICO scores. Written story, explaining why you went through foreclosure. Enrollment in a service that provides periodic credit reports and FICO scores.

Instructions

Steps to Ensure the Ability to Obtain Housing

1. Purchase a copy of your credit report and FICO score before you miss your first payment. This will provide a history of where your credit report was before you were facing foreclosure.

2. Keep your other credit accounts current. Explaining away a foreclosure is much easier than explaining why you failed to honor your commitments to your other creditors.

3. Purchase a recent credit report and FICO score so that you can provide it along with your preforeclosure credit report and FICO score to potential landlords.

4. Write and deliver to potential landlords a copy of your own "story," summarize where you were (a homeowner), what happened (you lost your home through foreclosure), the reason you decided why foreclosure was the best path to follow to resolve your financial situation, and how you cooperated with the lender to ensure that during and after completion of the foreclosure the home was turned over to the lender in good condition. Include as exhibits both your preforeclosure and post-foreclosure credit reports and FICO scores.

Tips & Warnings

• FICO score is an acronym referring to "Fair Isaac Credit" ratings, which grade consumer's credit ratings with a numeric score. Throughout the foreclosure process it is important that you seek the advice of an attorney familiar with the foreclosure laws of your state and debt collection practices. You can obtain one free credit report annually from each of the three major credit reporting agencies through the government's website at http://www.ftc.gov/freereports. Keep in mind that your FICO score is based on both positive and negative factors. Be suspect of any company that makes unrealistic claims relating to improving your credit score. That process takes time.

References

• "obtain one free credit report annually "
• "Fair Isaac Credit" ratings