Here in the Pleasanton Real Estate market a lot of people are in a very sticky predicament. They have lost their home to foreclosure, short-sale, bankruptcy, or a combination of those scenarios. They are now faced with a dilemma of not only trying to find a home to rent, but trying to do that with a very messed up credit. Some of the problems on the credit report could range from late payments, to collections, to unpaid credit cards,unpaid mortages and more.
Typically when a person completes an application to rent a home they pay a ’screening fee’ and authorize the landlord or a property management company to run a credit check. Some management companies also check for previous rental history (eviction) and criminal background as well. But, just because someone has less than stellar credit does not mean they will not be accepted as a renter. It really depends on the circumstances.
If a credit report shows that a person has a long history of consistently being late in paying all of their bills, are over extended on their credit lines, has multiple unpaid accounts or collections, and barely makes enough income to cover their rent, they will probably not be an acceptable rental candidate. On the other hand if the credit report shows a strong consistent payment history on most of their debts, unpaid or late items can be attributed to an isolated time frame during which a foreclosure or job loss occurred, the person can show verification of income, and they can show their income to be 2 to 3 times the amount of their rent, then they are in a better position to be considered an acceptable candidate.
Keep in mind it is up to the discretion of the landlord or property manager to make the final decision, but most of the time landlords or managers are willing to work with prospective tenants on these issues. It is always best to be open and honest about these potential credit issues before the rental application is submitted. Explaining the situation to the landlord/manager and having the discussion up front can help the prospective tenant determine their options before they get too far along in the application process.
In some cases the landlord or manager could require additional security deposits, but the deposits are limited to the amounts allowable by law (in California that amount is 2 times the monthly rent).
As we head into the 4th quarter of 2009 I want to remind you that each year you are eligible to receive a FREE copy of your consumer credit report from each of the three major credit bureaus. TransUnion, Experian, and Equifax will provide these to you at NO CHARGE. So if you haven’t done so this year, this would be a great time to get your updated reports.
Go AnnualCreditReport.com to obtain your FREE reports. There is NO credit card information required on this site to obtain your reports. (There are other sites out there that say they are free, but they will ask for credit card information before giving you access to your information.)
All sites will offer access to Credit Scores and there is usually a fee for that report. It may be worth the cost to keep an eye on your credit score, especially if you are planning on buying a home in the near future. Also if you are trying to repair credit problems, you can periodically check your score to determine how your score is improving over time.
You will have the opportunity to download your report from all three credit bureau reports at once, or you can download one (of your choice), and revisit the site at a later time to download another. Some credit professionals suggest downloading one every 4 months to keep an eye on changes throughout the year. Whichever method you choose, this is a valuable tool!
In some cases, if the system is unable to identify you online, you may be required to order your report via phone or mail. If this happens to you, simply follow the online instructions for obtaining the phone number or the appropriate form to download and mail. You will receive your credit report in the mail usually within 2 weeks.
You can also download forms to correct errors, dispute incorrect information, and/or remove outdated information.
Hope you found this information useful!
I recently heard a story about a buyer who was in contract to buy a home, had received his loan approval, then went out and bought a car using a cash down payment! Long story short, the loan was rejected in final underwriting review because the purchase of the new car had changed the debt to income ratio and also changed the amount of the cash reserves the buyer had on hand.
This reminded me of a list someone had given me years ago, so I dug it out of my files, and I am posting it here to share with you~
The Ten Commandments for Buyers……. Until Your House Closes
- Thou shalt not buy a new car
- Thou shalt not buy furniture for the new house or any other big expenditures that affect your bank accounts
- Thou shalt not make any unexpected or unexplained large deposits that affect your bank balance (unless it is a work related bonus, or a tax return, and then keep a copy of the check/deposit)
- Thou shalt not apply for any credit anywhere, and thou shalt tear up all of the offers for “Pre-Approved Credit Cards” that come in the mail
- Thou shalt not run up the credit cards that you already have
- Thou shalt not retire or voluntarily leave your present employment or change employment status
- Thou shalt advise your agent and your lender of any unexpected changes in your life, especially if it changes your marital status.
- Thou shalt not leave to go on vacation during the escrow process without notifying your agent or lender
- Thou shalt not spend money you will need for your down-payment and closing costs
- Thou shalt not be late paying any accounts during the escrow period
The year is half-over, but its not too late to remind you that each year you are eligible to receive a FREE copy of your consumer credit report from each of the three major credit bureaus. TransUnion, Experian, and Equifax will provide these to you at NO CHARGE.
Go to www.AnnualCreditReport.com to obtain your FREE reports. There is no credit card information required on this site to obtain your reports. (There are other sites out there that say they are free, but they will ask for credit card information before giving you access to your information.)
All sites will offer access to Credit Scores and there is usually a fee for that report. It may be worth the cost to keep an eye on your credit score, especially if you are planning on buying a home in the near future. Also if you are trying to repair credit problems, you can periodically check your score to determine how your score is improving over time.
You will have the opportunity to download your report from all three credit bureau reports at once, or you can download one (of your choice), and revisit the site at a later time to download another. Some credit professionals suggest downloading one every 4 months to keep an eye on changes throughout the year. Whichever method you choose, this is a valuable tool!
In some cases, if the system is unable to identify you online, you may be required to order your report via phone or mail. If this happens to you, simply follow the online instructions for obtaining the phone number, or the appropriate form to download and mail. You will receive your credit report in the mail usually within 2 weeks.
You can also download forms to correct errors, dispute incorrect information, and/or remove outdated information.
Hope you found this information useful!
With the new year rapidly approaching, now is a good time to remind you that each year you are eligible to receive a FREE copy of your consumer credit report from each of the three major credit bureaus. TransUnion, Experian, and Equifax will provide these to you at NO CHARGE.
Go to www.AnnualCreditReport.com to obtain your FREE reports. There is no credit card information required on this site to obtain your reports. There are other sites out there that say they are free, but they will ask for credit card information before giving you access to your information. All sites will offer access to Credit Scores, and there is usually always a fee for that report.
You will have the opportunity to download all three credit bureau reports at once, or you can download one (of your choice), and revisit the site at a later time to download another. Some credit professionals suggest downloading one every 4 months to keep an eye on changes throughout the year. Whichever method you choose, this is a valuable tool!
In some cases, if the system is unable to identify you online, you may be required to order your report via phone or mail. If this happens to you, simply follow the online instructions for obtaining the phone number, or the appropriate form to download and mail. You will receive your credit report in the mail, usually within 2 weeks.
You can also download forms to correct errors, dispute incorrect information, and/or remove outdated information.
Hope you found this information useful!
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