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Purchasing or Renting on Bad Credit



It's hard to make large purchases when you have bad credit. Whether you're fresh out of college looking for your first place, or a 50-year-old male who just lost his job and looking to downsize, your credit will haunt your every move and the pressure of keeping it nearly perfect may be hard.
 

In today's market, many landlords focus on credit checks to determine whether a potential renter is worthy of renting from them. It's important to do whatever you can in order to assure the landlord that you will be on time and reliable when it comes to your monthly payments.

 
When renting, it may be your best bet to have someone with better credit to co-sign your rental agreement. It may feel awkward having a good friend or even a parent agree to pay whatever payments you miss, so make sure you get that monthly rent on time or even early if you can. If you don't feel comfortable doing this, see if your landlord will be willing to accept written letters of recommendation from past employers, landlords and even old roommates to vouch for you; if you do this it is important to ask people who you have a good rapport with and not an employer, landlord or roommate you are on bad terms with. 
 
Of course there are some aspects in life that affect your credit such as losing your job or having medical issues, these things may affect your credit regardless of whether you can help it or not. Admitting to your bad credit may actually help you, it gives you the opportunity to discuss the path your credit has taken and where you are taking it (which is hopefully a positive). If you've previously rented and works in your favor, provide proof that you've been a responsible renter whether it be old bills or a reference from a landlord, showing them something that proves you're credit has no affect on paying your rent on time.  
 
If it is at all possible, pay your rent in advanced or even increase your security deposit.This will help alleviate some of your landlord's concerns.
 
It is absolutely feasible to get a roommate. They might even have better credit than you, and if it is possible for the lease to be signed by one person, see if they're willing to sign instead. Plus, your bills will be split and will ultimately relieve some of the financial burden for the both of you, while you take the time to rebuild your credit. 
 
Of course it's way more likely that you'll pay if you have a permanent job. While your credit may be below average, being able to show that you have money coming in at a steady rate, may make your landlord feel a little more comfortable with someone who has bad credit. When preparing to buy or lease, make sure to have your pay stubs ready along with tax returns and a letter verifying your employment status and income. 
 
Some landlords may even charge a "risk"fee if you have a poor credit score. Instead of paying for something you don't really need, consider offering to pay an amount higher than the amount you're being asked to pay. 
 
Keep in mind that this is a really big investment that can also affect your credit negatively or positively, depending on your payments. You're credit isn't something that recovers quickly, it takes a lot of time to repair, so make sure you never buy anything expensive you don't need or dig yourself a hole you can't get yourself out of. Be early or be on time but most importantly, be responsible. 

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