In today’s market landlords are sometimes reluctant to rent a home to individuals with poor credit and low credit scores. It is no secret that homeowners all over the country have suffered financial hardships. Job loss, decreased wages, disabilities, divorce, death of a spouse and many other life altering events have caused families to file for bankruptcy and lose their homes to foreclosure. These unforeseen hardships will no doubt have a severe impact on your credit scores.
Lisa Jefferson, Broker/Owner of The Atlanta Homebuyers Realty Group, suggest these steps when counseling tenants to help increase the chances of successfully renting a property even if your credit scores are low and your credit report is not very appealing to the landlord.
Step 1 – Tenants Must Pull their Credit Report In Advance
It is a must that you (tenants) know what is in your credit file. I find that this Proactive Approach saves time and prepares the landlord in advance to look at your situation objectively. Visit http://atlantaleasepurchases.homestead.com/
Step 2 - What the Landlord is looking for on your Credit Report
Your credit scores in many cases are not the total deciding factor in a successful rental. Here is a list of items a landlord does not want to see on your credit report.
a. Outstanding Balances from Apartment Complexes
b. Outstanding Judgements or Liens from previous landlords
c. Multiple addresses that indicate that you move around lot
d. Newly Dismissed Bankruptcy
e. Numerous and recent unpaid collections
Step 3 – When Writing a Letter of Explanation for the Landlord is Necessary
Assuming that your credit is damaged because of an unexpected hardship such as a
job loss, decreased wages, divorce, disability, death of a spouse, illness or a foreclosure, the tenant should always write a detailed letter of explanation and attach it to any rental application that is submitted to the landlord. By writing this letter you can help explain in detail what caused your credit scores to decrease. Visit http://atlantaleasepurchases.homestead.com/
Step 4 – Additional Documents to Submit to the Landlord if Your Credit Score is Low
In order to prove to the landlord that you are a viable candidate for renting his/her property, by providing documents such as your bank statements (checking and savings) and your 401K statements your case can be strengthen. However if a landlord can easily identify that you have the funds to manage the rent, he/she may require a larger security deposit which is not unheard of. But if the landlord request that your security deposit and the monthly rent increase, I would advise that you move on to another property. Providing additional documents should only be to prove that you have the resources available to comfortably manage the monthly rental payment and should not be used to take advantage of you by increasing the rent.
Step 5 – Submitting the Rental Application
Usually there is a fee associated at the time the rental application is submitted. This fee is non refundable and can range from $25- $350, depending on the leasing broker you are working with. The fee will usually cover the background check, the credit check, the
rental and reference verification.
Step 6 – Consult Your Own Real Estate or Leasing Professional!
It is more important than ever that tenants understand the need for a real estate or leasing professional to represent them when acquiring a rental property. In today real estate market, there are just as many landlords and investors losing their properties to foreclosure as homeowners. In many situations, a tenant has to rely on the honesty and integrity of their landlord to make sure that the landlord is going to pay the mortgage every month. Unfortunately, that is not always the case, some landlords are notorious for taking money from tenants every month, but failing to make the mortgage payment, which result in the tenant being evicted from the rental property. Therefore it is important that the tenants protect themselves by seeking the advice of a real estate or leasing professional to assist with the screening of the landlord.
Step 7 – Know Thy Landlord Before Signing the Rental or Lease Agreement
In pursing a space to rent or lease never allow yourself to believe the landlord is doing a huge favor for you! Although you may have had some credit challenges, the landlord must also uphold his end of the deal. If the landlord/tenant relationship is going to be successful, the landlord must fully disclose any situations that could possibly put the tenant at risk of being evicted from the rental property because of foreclosure. As mentioned in Step 6, some landlords can be notorious for taking money each month from tenants and not paying the mortgage, so before the rental or lease agreement is signed be sure and ask these 10 questions of the landlord to ensure that your families’ interest is protected while renting a property.
Lisa Jefferson, Broker/Owner of the Atlanta Homebuyers Realty Group, assist tenants with acquiring rentals or lease purchase properties. For a complete list of homes for rent, please visit http://atlantaleasepurchases.homestead.com/