How to Lease With Poor Credit

Always check your credit report before applying for a lease.

Your ability to lease with poor credit may largely be determined by the type of product you're trying to lease. For example, leasing an apartment or a home with poor credit may be easier than leasing a new automobile, Landlords know they can evict you for not paying rent, but an automobile leasing company might have a tougher time getting your leased car back if you stop making payments.

Instructions

1. Review your credit reports. It's important to know what your potential landlord or leasing agent is going to see when they pull your credit reports. Get free copies of your reports at the website Annual Credit Report. Federal law entitles you to one free copy of your report every 12 months from the three nationwide credit reporting agencies -- TransUnion, Experian and Equifax.

2. Correct any inaccurate information on your report that may be hurting your credit scores. Examples include a delinquent account that isn't yours or delinquent accounts that should no longer be included on your reports because of statute of limitation guidelines -- usually seven years. Visit the websites of the credit bureaus to enter disputes.

3. Study the negative information on your reports and be prepared to respond to questions about your credit as the landlord or leasing agent reviews your application.

4. Place a consumer statement on your credit reports explaining why you have poor credit. Under federal law, you can enter a statement of up to 100 words on your credit reports, and up to 200 words if you live in Maine. Use that opportunity to explain that you fell behind on your bills because of an illness, long-term unemployment, or some other reason. Call or write the credit bureaus to enter your statement.

   TransUnion Consumer Solutions
   P.O. Box 2000
   Chester, PA 19022-2000
   800-916-8800

   Equifax Consumer Services
   P.O. Box 740256
   Atlanta, GA 30374-0256
   800-846-5279

   Experian
   P.O. Box 2104
   Allen, TX, 75013
   888-397-3742

5. Prepare another letter explaining your credit situation. Explain why you fell behind and tell how things are different now. Point out that medical bills that knocked you off track are paid off now, or that you have finally found work again after a long layoff. Stay with the facts and avoid emotion or finger-pointing in writing the letter.

6. Present your letter along with your application for the lease. Also present other documentation, including pay stubs, a recent offer letter for a job, and letters of recommendation from other companies you have recently leased from, such as an apartment complex.

7. Tell the leasing agent about your credit issues when you apply. Be upfront and honest. Offer to make a larger deposit, if applicable. Formally apply and wait for a response. If you are turned down, ask if adding a co-signer will help, or correct the problems with your credit and try again.

Tips & Warnings

• Consider renting from a private individual if you're looking for a house and your credit is really bad. Some private landlords do not conduct credit checks. Others will take a chance on people with bad credit by requiring a deposit equal to the first month's rent, along with rent for the first month and the last month paid in advance. That means having to pay $4,500 upfront for a $1,500 a month condo, but for some, that could be better than being turned down.

References

• Bankrate.com: Your Credit History And Rent
• Bankrate.com: Foreclosure Crisis Hits Rental Housing