When you are looking to rent a home, your landlord may want to check your credit report while evaluating your application. If your credit is less-than-perfect, all is not lost. Most landlords aren't looking for perfect credit – they just want to protect their investment. Here are 6 tested strategies you can use to improve your chances of being approved. We've succeeded using five of them!
Money up front: It's common to require your first and last month of rent up front, plus a security deposit. Offering additional funds can help your case. For example, you might offer to make a larger security deposit or pay an extra month's worth of rent. We personally offered a few months of extra rent to lease a furnished apartment with an ocean view in Santa Monica, California, and stayed there for more than a decade. Be careful, though – a shady landlord may be tempted to keep that money or take his time paying it back.
Engage small-time landlords: It's safe to assume that large rental agencies and experienced landlords will use tenant-screening services. However, a newer landlord or a laid-back property owner is less likely to go through your past with a fine-toothed comb.
Add a co-signer: A co-signer is somebody who signs your application with you and promises to make your payments if you don't make payments. Just like a co-signer on a loan, the co-signer becomes legally responsible for you (so your landlord can sue the co-signer), which is a generous and risky move. (This is the only tip we haven't personally tried.)
Get references: Your credit and background check tell a story, but you can add additional voices to that story. Ask your current and previous landlords to write letters or make phone calls describing your payment history and other experiences with you. Good reviews can go a long way toward easing potential landlords' concerns.
Provide bank statements: If you've recently fallen on hard times, landlords will wonder if you can keep up with payments. Show them that you're capable of paying the rent by providing bank statements with your income and regular expenses.
Be proactive: If there are any issues in your past, they're likely to come up when a landlord looks close enough. Discuss those issues up front. Explain your situation to prospective landlords verbally, or (if you don't know who makes the decisions) include a letter of explanation with your written application. Note that full disclosure can backfire – if the landlord doesn't order screening reports, you might be telling them something they never needed to know.
What's in Your Report?
In most cases, you'll pay for screening reports, but you don't necessarily get to see them. You can always ask, but landlords aren't required to show you anything.
However, if the information in those reports is used against you (requiring a larger security deposit or leading to the denial of your application, for example), the landlord must provide an Adverse Action notice. This is true even if the landlord's decision was only partially based on your credit reports.
Adverse Action notices are required under the Fair Credit Reporting Act (FCRA). They can be verbal, written, or electronic, but they must include the following important details:
- Contact information for the consumer reporting agency that provided your report
- An explanation of your right to get a free copy of your consumer report within sixty days of the Adverse Action notice
- An explanation that you have the right to dispute errors in your consumer reports
Unfortunately, landlords don't always follow the law. They may be unaware of the rules, or they choose not to follow them. Either way, you lose the opportunity to find out about problems in your credit reports.
If a landlord denies your application or requires something extra, ask if the decision was based on information in your consumer reports. If it was, demand an Adverse Action notice and refer your landlord to the Federal Trade Commission (FTC) guidance for landlords. Receiving that notice gives you the right to request copies of your reports for free (but only for sixty days after you receive the notice – so act fast). Order copies of those reports, and look through them carefully. If there are any errors, fix them immediately.
Want to take a look at your credit before you fill out a rental application? You can check your credit score and read your credit report for free within minutes using Credit Manager by MoneyTips.
Photo ©iStockphoto.com/monkeybusinessimages
Originally Posted at: https://www.moneytips.com/6-tips-to-improve-your-chances-of-renting-despite-poor-credit
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