Foreclosure usually results in bad credit, which can make it difficult for a former homeowner to secure a new mortgage, a car loan or even a real estate rental since most prospective landlords tend to check the credit rating of potential tenants in order their credit risk.
There are ways, however, to rent a home with less than perfect credit.
Secure a Co-Signer
If a friend or relative with good credit is willing to co-sign a rental application, you’re credit rating may not be an issue. The co-signer will agree to make the monthly payments if you are unable to. This is not an ideal situation but it is a solution while you work on improving your credit history.
Oftentimes a bad credit rating can be the result of a temporary setback. If you are upfront and honest about your past financial difficulties and are able to show you’re back on track, you may be able to negotiate with a landlord and have them overlook your negative credit rating. It is better to be forthright than wait for the landlord to run a credit check only to discover your credit is not ideal.
Pay in Advance
Agreeing to pay your rent in advance or increasing your security deposit can go a long way during a rental negotiation to prove to your prospective landlord that you are committed to the rental agreement despite your negative credit rating.
Get a Roommate
Aside from reducing your rent, having a roommate may enable you to bypass a credit check altogether. If you can find a room to rent in an occupied home, you may not be expected to sign the lease. This can allow you to work on significantly reducing your debt and improving your credit rating.
Demonstrate Income and Pay via Direct Deposit
By providing proof of income by submitting pay stubs, tax returns or a letter from your employer, you can reassure your landlord that you are a responsible tenant, which may offset any negative reaction they have to your credit report.
Agree to Pay More
If you are willing to increase the rental amount as a sign of good faith, some landlords may be willing to overlook your negative credit rating. Additional risk fees are common when a prospective tenant has a less than ideal credit score.
Providing a letter of recommendation from an employer, a landlord or even a friend may increase your chances of securing a rental. If you are able to clearly explain your situation and also provide reassurance from a third party that you are trustworthy, this may steer a prospective landlord in the right direction.