Your credit score matters when it comes to renting a home. Landlords can and do carry out credit checks on potential tenants (but remember, they have to get your permission first). If you’ve got a great big black mark on your credit history – or even a little black dot – you’ll probably kiss that rental goodbye.

It sounds unfair and could leave you homeless. But landlords aren’t running a charity. A bad credit history rings alarm bells to landlords and most believe that two and two equals four so therefore you won’t view paying the rent as a priority.

You can resurrect your credit score over time, but the crunch is that you need a home now.

If you can convince potential landlords or property managers to listen to you, then explain what went wrong in the past. Give him or her concrete reasons to believe that you’re going to be a model tenant now.

Here are seven sales pitches to overcome your bad credit and get a rental:

1. Tell your story
   Why do you have bad credit? Sometimes there’s a perfectly valid reason that your landlord will understand. Maybe you had a business or marriage failure, but you have evidence to show that you were a good payer prior to this personal disaster. The more paperwork you can show to back up your case the better. Don’t expect your landlord to feel sorry for you however if you simply didn’t pay your bills and drank or partied your rent away.
2. Find a guarantor
   If you can find someone such as a parent or grandparent to go guarantor for you, this should satisfy some of your landlord’s worries. A guarantor signs a guarantee that they will pay your rent if you don’t. If you front foot the landlord with the offer of a guarantor, rather than vice versa, you do your case a lot of good. Having a guarantor won’t always satisfy landlords. They often believe, and there’s some truth in this, that people who are bad bill payers might not have high standards in other parts of their lives and could damage the property.
3. Agree to pay automatically
   Landlords love tenants who set up automatic payments (APs). If you volunteer at the outset the landlord may view you more charitably. It’s one big headache out of the way for them. Work and Income clients can arrange for their rent to be paid by AP. If you do get a foot in the door don’t blow it by letting the AP bounce. You’ll get yourself booted out before you know it if you do this (although the landlord does have to give notice or get an order from the Tenancy Tribunal). You don’t want to go back to square one, or worse. It’s always a good idea to time the rent payment to go out on the same day you’re paid.
4. Offer to pay the maximum bond
   Chances are your landlord will want the maximum bond of four weeks’ rent anyway. But if you make it clear at the open home that you have the total amount available immediately you might look better than the other potential tenant who wants to bargain the landlord down on the bond. Landlords can’t by law take more than four weeks rent or any other forms of security such as ‘pet bond’. It’s illegal.
5. Show solid income
   If your bad credit came from your time as a student, unemployed, underemployed, or it was sexually transmitted debt and you can show your circumstances have changed a landlord might be willing to consider you. Strengthen your case with payslips for your new job and any other financial information such as bank statements that back up your story.
6. Get references from your existing landlord
   This can help. But landlords are sometimes wary of references in case the last landlord wrote it to get rid of you, or for that matter it’s fake. I’ve heard of cases where the clients were smoking methamphetamine on the property. The landlord was so desperate to get rid of these problematic tenants that he wrote them a glowing reference.
7. Be a flatmate instead of tenant
   If you really can’t find a landlord to take you on then consider being a flatmate in the meantime whilst you resurrect your credit. Or if it’s a group of you going flatting can you arrange for someone else to be the lead tenant who signs the tenancy agreement? If the lead tenant is renting through an agency you might want to make contact. Show a record of your regular payments to your flat account and put your name down in case another property comes up with the same agency. Read our top tips for new renters before you apply. If you’re a family, perhaps there is a tenant with a minor dwelling that could be sublet to you.

If you do land this tenancy, whatever you do, make sure you live up to your promises. Paying your rent (utilities, credit card and other bills) on time every week without fail may help resurrect your credit score and will give you a track record of being a good tenant to fall back on in the future.

The post How to get the rental you want even if you have bad credit appeared first on Credit Simple NZ.

Getting your first rental is a rite of passage into the big wide world. You’ll have lots of fun times nesting in your own space. But there’s a lot to learn to make it a great experience.

1. Be prepared to wear out your shoe leather.
You’ll need to sign up with several local rental agencies and keep a hawk eye out on TradeMe and Realestate.co.nz until you find the one – and get accepted. Before signing the tenancy agreement ask yourself: is it in good condition? Will it be cold in the winter? Is it secure? Tip: Find out if you are expected to mow that football field-sized lawn out the back? Can you park off road? How far is the bus stop/supermarket/pub?

2. You need squillions of $$$$ up front.
If you’re living on the bones of your credit card limit, it can be difficult to get the money together for your first rental.  You’ll need to pay up front for up to six weeks’ rent in advance as bond, PLUS the first two weeks accommodation, PLUS two weeks rent as a letting fee if you go through a real estate agency. Tip: If you’re really lucky, your landlord may let you pay some of this off over time. In most cases you’ll have to borrow the money to get your foot in the door.

3. You’ll need to sell yourself.
Sometimes hundreds of people attend viewings. Get yourself to the front of that queue by looking clean, tidy and professional; that means having all the necessary detail in the application and having a good attitude (which includes not letting your kids run amok). Tip: Make sure your car is spotless inside and out. Landlords and agents often take a peek to avoid letting to messy people.

4. You pets will cause you trouble.
Many more rentals are available to people without pets. We know that Charlie’s the best behaved dog ever. But all your landlord can see is damage caused by pets. Pets in rental properties often destroy curtains, urinate on or rip up the carpet, scratch doors and walls and so on. Tip: By law landlords can’t charge you an extra ‘pet bond’ over and above the maximum bond even if you want to.

5. One year is one year.
Landlords usually want you to sign up for a fixed term of one year. If you do so, you can’t just up and leave – even if you’re saddled with the landlord from hell. If you move out before the year’s up, you’ll still need to keep paying rent until the landlord finds a new tenant. You’ll also have to pay for the advertising costs. Once the fixed term ends, or if you sign up for a periodic tenancy then you only need to give 21 days’ notice to leave. The landlord must give 90 days. Tip: Make sure you give notice in writing, include the address and the date you’re going to leave and the letter is signed by all the tenants who signed the tenancy agreement.

6. You might burn the landlord’s house down.
Great party, but the pot on the stove catches fire and burns your landlord’s house down. Don’t laugh, this has happened and it cost the Dunedin students big time. Tip: Most contents insurance policies include liability cover, which pays out if you damage your landlord or neighbour’s house or other property accidentally.

7. It feels like you need a law degree.
Only joking. But your tenancy agreement is a legal document. If your landlord breaches the Residential Tenancies Act by doing things such as turning up unannounced or failing to fix security you can complain to the Tenancy Tribunal. Tip: It doesn’t always need a full Tribunal hearing. You may be offered telephone mediation instead.  

8. You need to keep your credit record clean.
Landlords can and do check potential tenants’ credit records. Guess what? If you’ve done a runner from rent or bills in the past the chances are you won’t get a look-in on the perfect house you’ve just found. Check your credit file with illion, Veda and Centrix to see if there are any blemishes (you can check your credit score right here with Credit Simple). Pay off outstanding debt to clean up your record. Tip: You might need a guarantor if your credit record is a little blemished.

Finally, happy house hunting.

The post Top tips for new renters: Eight things to know before you apply appeared first on Credit Simple NZ.