OK, so if you're bankrupt and you absolutely need to rent an apartment here's what I would do:
• Purchase your FICO credit scores. You'll see why in a minute.
• Make a list of all the apartments you're interested in renting.
• Call each apartment complex and interview the apartment manager.
Here are some credit questions to ask:
1. Have you previously rented apartments to people who've filed bankruptcy?
2. What are your credit guidelines? (How do I get approved?)
3. Which credit reporting agency do you use to make a rental decision?
4. How important is my credit score in your decision?
5. I purchased my credit scores last week and my FICO scores are [insert your FICO scores here]. How do these scores sound to you?
6. How much do you require for a security deposit?
7. What income do I need in order to qualify for the apartment I'm considering (some agencies will require your monthly gross income to be three times the apartment's market rate)?
Three other factors that will have a major influence on whether you get accepted or declined are...
1. Whether you have a good rental history. Some apartment complexes will require you have at least 12 months of rental history before they rent to you.
2. That you have no utility collections on your credit reports.
3. And obviously, if you've ever been evicted—that sure won't help you.
So keep these three factors in mind when interviewing for apartments.
What you will quickly learn is that each rental company has their own credit guidelines. Some will require two years after discharge...Others four years...Most will only require you to be discharged. In addition, some will also look to see if you're on ChexSystems. (If you've never heard the term ChexSystems, it means you're not in it—and that's a good thing!)
In addition, depending on the season, the number of vacancies, or the general attitude of the property manager, you may have more flexibility than you think.
One thing to look for is a "move-in special." If an apartment is running a special deal like, "one month free rent if you move in before August," that usually means that their occupancy rates are low. They may be more willing to work with you.
Also, most apartment complex managers have the ability to override a credit decision if you can show them evidence that you will be able to make your rent payments every month.
The best advice I can give you is to be upfront with the apartment manager. Get answers to the questions I listed above. Interview many apartment managers. And then pick the apartment that works best for you.
Whatever you do during the apartment interviewing process, do not, I repeat, do not allow the apartment manager to pull your credit reports. It's better if you collect all the facts and take one credit inquiry hit compared to several apartment credit inquiries.
You can minimize credit inquiries by not signing a credit application and/or not giving out your Social Security number.
If the apartment manager is perplexed as to why you refuse to allow them to run your credit, simply explain that you're trying to keep your FICO credit scores as high as possible by avoiding unnecessary credit inquiries. Each time you sign a rental application you're giving permission to the apartment complex to review your credit, and credit inquiries lower your credit scores.
And don't fall for the "you need a co-signer" line. There are other ways to overcome credit guidelines. One way is a larger deposit.
With that said, I still feel there is a better way to rent if you're unable to purchase right now. Avoid the apartment complexes altogether and rent from an individual landlord or someone who has a house for rent. Major apartment complexes almost always have much stricter guidelines than individual landlords.
Some people have even moved into homes on a "handshake" deal. No credit checks, no outrageous security deposits, no hassles.
Another advantage is a landlord will often look at a credit report you provide him, and not pull one on his own—saving you a credit inquiry on your credit reports.
And when you rent from an individual, as opposed to an apartment complex, there's more of a human element to it. Who knows? Maybe the person you're renting from filed bankruptcy a while ago, and will be more understanding of your plight.
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Stephen Snyder is the founder of the After Bankruptcy Foundation a non-profit organization that helps people recover after bankruptcy. He has helped thousands of people increase their credit scores so they could rent an apartment after bankruptcy.
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