How do you get a rental when you have terrible credit?

Question: How do you get a rental when you have terrible credit?

Answer: Like many single moms who have experienced a financial bane, I found myself in a situation that dropped my credit more than 200 points. When I left my marriage, I was pregnant and had two toddlers. I had been a stay at home mom for almost five years, so I didn’t have a job or steady income. On top of that, all the home renovation expenses for the house we bought as a foreclosure fixer upper went onto credit cards in my name. I didn’t just leave with nothing, I left more than $40,000 in the hole. Because of all this, there was no way I could jump into my own rental and I was fortunate to be able to live with family during a rebuilding phase.

I’m going to share the steps I took to rebuild my credit and the exact letter I sent to my new landlord that helped me get into a great home for my family.

1. Let the cards go into collections

Oh my God, this is the worst advice ever. Isn’t it? Well, not exactly and I’ll explain why I wish I had heard this advice sooner. Let’s look at my situation. I was pregnant, out of work, had several mouths to feed and $40K in debt. That is no small issue. There was no way I was going to be able to leverage the small amount of money I earned through various freelancing to make a dent in that debt and even significant loans couldn’t offset the mounting interest and long term payments. If I had known I would be going into collections ANYWAY, then I should have stopped paying it back immediately so I didn’t exhaust the funds I had in just tackling payments of interest. Once my cards were in collections and I was working, I was able to negotiate the debt down and pay off the principal, so in effect I was getting more “bang for my buck.”

2. Get a job

A few months after I had my third baby I sought help on rebuilding my life and the resounding advice was: GET A JOB. It seemed like an impossibility at the time because I had been out of work for five years, but that was all the more reason to find a way- any way- to dive back in and begin to prove myself as a professional. I took it in phases and experienced a few blows along the way. For example, I started with a retail job around the holidays. As quickly as I was hired, I was let go after the season and I had to go right back to the drawing board of searching feverishly for work and balancing interviews alongside caring for my children with no consistent source of income. Nearly nine months after I began searching, I finally secured a full time position in my field. It was not in an industry I would have chosen outright, and I literally paid more for childcare than I brought home for the first three months. Ultimately, it was the stepping stone I needed and staying there for a year proved consistency and dedication to professionalism.

3. Pay off everything ASAP

I had to jump through major hoops to recuperate any equity from the sale of my marital home, but you better believe that I paid off the balance of my debt the moment the ink was dry in the settlement. In fact, our settlement company literally wrote checks to my credit companies instead of to us. I was dead set on getting out of debt, so I buckled down to make it happen as soon as it was humanly possible. I had one card that I paid off early and kept open, but other than that all my accounts closed when they went into collections. At this point, I keep no debt rolling from month to month - and I take care of bills that come in right away.

4. Do not open any new cards

Let me say this again for two reasons. First of all, I need to make this message clear because the minute you make any leap in your financial standings, the credit card companies will come prey on you. With literally nothing to my name (except a steady flow of income from my job that went directly to daycare), I began receiving applications for credit cards on a daily basis. They would congratulate me on making progress on my credit score. Clearly I was someone who had a credit problem, and they came right back after me. No matter how good my intentions were- using the funds to build and improve a home seems pretty noble- it was like handing the shopaholic a credit application at the end of the book. Shooting fish in a barrel. On top of that, the offers sucked. The interest rates were well over 20%. I was already lighting my money on fire every week making daycare payments, I didn’t need to add gasoline to that fire.

After all this, I spent a few months on even footing, trying to balance what came in with what came out and even setting aside some money in order to get into a place of my own. I honed in on a location after finding a job and sent out a letter expressing my interest in the property and asking, ever so gently, if they would make accommodations for me after my situation. It took over a month for a reply, so there was definitely reluctance, but it ultimately worked out so I’m sharing my letter with you in case it helps you as you rebuild. Please make it your own- and be honest. There’s no shame in going through a rough time and growing from it, but be sure to follow through on your promises. If this post helps one person in a similar situation find a home sweet home, it will be worth all the sleepless nights anticipating a reply while I was an unlikely tenant.






Here is my letter for getting a rental in spite of my terrible credit:

Greetings Homeowner!

My name is Jeannette and I am a professional and a mother of three young girls. I found out about your rental through {realtor}  and asked my family to tour the home the other night because I am relocating from {state}. My family has lived in {town}  for 10 years and we are hoping to live near them. The proximity to {school} would be convenient for my two oldest girls. In addition, we would go to Church and the YMCA for community involvement. I just secured a position at a local company and am hoping to move as quickly as possible to help my children settle in this summer before starting school in the fall. This note is intended to let you know about my interest in the home and to clarify my credit history. I hope that as you read it, you will see that I am a responsible and respectful person, and that we might find my residency at your house would be mutually beneficial.

In my early years as a young professional, I had terrific credit history and an employment record. I rented for 3 years from {landlords} before purchasing a foreclosure with my then husband. We quickly invested all our funds into the home and utilized my credit to make drastic home improvements including a completely new kitchen and two bathrooms, carpeting, driveway repaving, and more. For a time, we paid down the cards and then utilized them again as more projects pop up (because they always do when you have a home.) In 2014, I was a stay-at-home mom of two and my ex lost his job. He started a Landscaping Business and I became pregnant with our third baby. A few short months later, I left our home and marriage because of a toxic situation from his alcoholism. At that point I moved in with family because I had no income and resided there for 2 years while slowly rebuilding my life.

In June 2016, I reentered the work force full time and quickly worked to resolve my financial discrepancies. With legal help, I was able to prompt my ex to agree to sell our home at a profit to pay off the majority of the credit card debt that had lapsed in my name. I paid off the balance, including my student loans, out of pocket. I am proud to say that today I am debt-free. It takes time for those marks to come off a report though, and I believe that I will be scathed for the next several years. Which may affect my ability to rent or even buy a home.

Although I am in a much more stable position financially, with savings and with the promise of a new job opportunity, I will need to rent from someone who can see that I am a trustworthy and honest person. If you would like to consider me as a tenant, I am asking that you would please lower the monthly rate. I cannot afford more than $$$ per month, but I will treat the space as if it is my own and have already commissioned the help of family to reinvigorate the front and rear outdoor space.

Thank you for your consideration.

Jeannette B