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My Credit Is Bad. I Can't Buy So I'll Have to Rent.

By Barbara Altieri

Real Estate Agent with Better Homes and Gardens RE Shore and Country Properties RES.0781237

January 13, 2011 01:50 PM

My Credit Is Bad. I Can't Buy So I'll Have to Rent.

Yesterday I received a call from a would-be renter who wanted me to show her a rental. Well, with 20" of fresh snow on the ground, my first response before anything else was "Sorry, not today..." then I proceeded to qualify her.

She told me she could not buy a house because her credit was so bad so she decided that she will just rent instead. Ohhh...kay....

One of the requirements with any rental is that the renter must provide a credit report with a FICO score to the landlord/homeowner when presenting an offer. Occasionally, I am able to make a case for a rental client with a low FICO if s/he is currently renting and references indicate s/he is a good tenant and has paid rent on time each month.

So, if you can't buy because of poor credit, you may not be able to rent either as an acceptable credit report is a requirement to rent.

So what do you do? Every individual is entitled by law to check his/her credit once a year via AnnualCreditReport.com which is the ONLY authorized source for a free credit report.

If you are thinking of renting or buying, it would be worth your while to check your credit before you begin your search. Even if you're not renting or buying, check it anyway. It's free! There may be entries that are incorrect that can be disputed, removed, and bring the FICO score up.

(Note that a FICO score is not included with the free reports. There is a charge to get your score.)

My Credit Is Bad. I Can't Buy So I'll Have to Rent

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Karen Feltman

Cedar Rapids/Iowa City, IA KW Legacy Group - Cedar Rapids, IA

Relocation Specialist in Cedar Rapids, Iowa

Very informative! I think that most consumers do not realize that most management companies use credit and background checks the same way that lenders do.

Jan 13, 2011 01:54 PM

Joan Valverde

HomeSmart - Colorado Springs, CO

GRI,CDPE,CNE,MRP,SRES Colo Sprgs, Blk Forest, Monu

Barbara, very good point to consider. If people really get into a bad way, it could effect them in so many more ways then they realize!!! Alls we can do is to help them out with the information we have.

Jan 13, 2011 01:56 PM

Suzanne Taylor

Ultima Real Estate - Corpus Christi - Corpus Christi, TX

Home Sales In Corpus Christi, TX

Barbara, you are so right. Most rental property management companies charge an application fee and use it to run a credit report and with bad credit, you stand a very good chance of being turned down. Total waste of money. Good suggestions.

Jan 13, 2011 01:59 PM

Steve Ewing - Keller Williams Realty

Keller Williams - Stockton, CA

Barbara - These are the people that you get with a group that can repair their credit and someday maybe they can be a client. Put them on a drip campaign to keep in touch. Thanks for the blog.

Jan 13, 2011 01:59 PM

Barbara Altieri

Better Homes and Gardens RE Shore and Country Properties - Shelton, CT

REALTOR-Fairfield County CT Homes/Condos For Sale

Karen -- Exactly. Many of my rental prospects are genuinely surprised we have to run a credit report.

Joan -- Sure, it's not just getting a loan or renting a property. Credit is checked for certain jobs, especially where a security clearance is involved.

Suzanne -- Good point. That's why everyone should take advantage of the free credit reports they are entitled to so they know where they stand before pursuing a major purchase. (or rental)

Steve -- Oh, yes, I have a couple going through credit repair right now. They hope to be able to purchase sometime in the summer.

Jan 13, 2011 02:31 PM

Peggy Chirico

Prudential CT Realty - Manchester, CT

REALTOR® 860-748-8900, Hartford & Tolland County Real Estate

Hi Barbara - This is a great post and with more renters than ever you have provided valuable information.

Jan 14, 2011 01:42 AM

Barbara Altieri

Better Homes and Gardens RE Shore and Country Properties - Shelton, CT

REALTOR-Fairfield County CT Homes/Condos For Sale

Hi Peggy -- Thanks, Peggy. You're right about there being a lot of renters. The main problem, though, with finding them a rental is an unacceptable credit report. People have to be more proactive by taking advantage of the free credit report everyone is entitled to by law.

Jan 14, 2011 07:49 AM

George Souto

George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT

Your Connecticut Mortgage Expert

Barbara, I don't think that a lot of new renters realize this. The Landlord might be more lenient then a Lender, but they don't want to get stuck with a bad tenant either.

Jan 14, 2011 09:53 AM

Barbara Altieri

Better Homes and Gardens RE Shore and Country Properties - Shelton, CT

REALTOR-Fairfield County CT Homes/Condos For Sale

Hi George: You're right about the 'possible' leniency. Every situation is different. Sometimes there might be a credit ding which resulted in a good hit on the FICO, but the tenant has shown responsibility in making payments in the last year and has possibly been in credit rehab. Most landlords only want clean credit; others 'might' take everything into consideration if the record has been showing improvement and agree to offer a lease.

Jan 14, 2011 10:17 AM

Silvia Dukes PA, Broker Associate, CRS, CIPS, SRES

Tropic Shores Realty - Ich spreche Deutsch! - Spring Hill, FL

Florida Waterfront and Country Club Living

Hi Barbara, it's a good reminder for everyone to periodically check your credit score for accuracy. We always get credit checks and look for late payments and other things that would raise a red flag.

Jan 14, 2011 01:25 PM

Karen Bernetti

Southington, CT

Barbara, This is GREAT information to share. People make such broad assumptions - it must be tough when they realize their options are limited when their credit is messed up so badly. That's quite a wake up call. it makes me sad to hear stories like this. Where will these people live?

Jan 14, 2011 01:45 PM

Barbara Altieri

Better Homes and Gardens RE Shore and Country Properties - Shelton, CT

REALTOR-Fairfield County CT Homes/Condos For Sale

Silvia -- Absolutely. The report may not always be accurate. It's also a good way to check up on inquiries that you may not even be aware of.

Karen -- Yes, it is tough especially when they assume their credit is OK and they find it is far from it. IN those cases, they typically live with friends or family and they get into a credit repair program. It's best NOT to assume anything, get the free credit reports, and get a good handle on their credit profile.

Jan 14, 2011 02:06 PM

Dave Halpern

Dave Halpern Real Estate Agent, Inc., Louisville, KY (502) 664-7827 - Louisville, KY

Louisville Short Sale Expert

Many potential home buyers are 3 to 6 months away from repairing their credit and qualifying for a home. They need a good credit repair company, a patient mortgage broker, and a caring Realtor who will guide them through the process.

Sep 04, 2017 04:59 AM

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Barbara Altieri

REALTOR-Fairfield County CT Homes/Condos For Sale

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Author Bio: Barbara Altieri, CT REALTOR®, helps Fairfield and New Haven County buyers and sellers successfully navigate through a real estate transaction. A proven sales and marketing professional, Barbara provides exceptional customer service and market knowledge. Call 203-520-6930 to discuss your needs and housing dreams.

All data and information provided on this blog is for informational purposes only. Barbara Altieri makes no representations as to the accuracy, completeness, correctness, suitability or validity of any information on this site and will not be liable for any errors, omissions, or delays in information or any losses, injuries, or damages arising from its display or use.

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