Your credit report and bankruptcy
Your credit report, get it while it’s hot!
As you already know, your credit report is everything these days and you can’t do much without it. Once you file for bankruptcy, your credit rating goes out the window. This of course makes it very difficult for you to get credit again, apply for loans, rent property etc. One thing you can do prior to filing your bankruptcy petition is to get a copy of your credit report from the three credit bureaus while it’s still in good standing.
You’ll find quickly that after bankruptcy things get more complicated, but there will be times when you might encounter a company or someone who may be willing to work with you despite your current credit score. When someone is considering approving you but needs some convincing, your previous credit history could be the key to closing the deal. Of course this is not going to apply to everyone, since some people have bad credit all their lives and most creditors will simply not care how good your credit was before you filed. So these are special circumstances in which it’s important that you actually had good credit with a good score prior to filing bankruptcy, it can give you some leverage in certain negotiations.
With the current state of the mortgage market and the number of foreclosures and bankruptcy cases around the country, many people are losing their homes and in some cases voluntarily surrendering their homes to their lenders after filing bankruptcy chapter 7. Whether you willingly surrender your property or it is foreclosed by your lender, you’re going to need to live somewhere, and having a copy of your credit report prior to filing could make a difference.
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Another thing to keep in mind when you go looking for a place after you leave your home is to try and stick to places that are being rented by individual owners. Apartment complexes are going to have management companies who often require the typical procedures for renting, which are a credit check, references, rent history and a long application and normally frown when they see consumer bankruptcy entries on credit reports.
Renting from a property owner who manages their own property could be a better option since they’re usually more motivated to keep their places rented. Just be honest about your bad credit and bankruptcy case when you approach them. You may find that they can be more understanding and sympathetic than a management company. Often these real estate investors will hire management companies to do this for them. These are usually smaller companies that work hard to keep a high level of occupancy and can be very flexible, you just need to ask.
If you don’t have much choice when you start looking for a place, and decide to stick to the apartment complex settings, look for places that show move-in specials like 1st month free, or 1/2 month rent for 2 months etc. These incentives are a sign that these properties have more vacancies than they’d like, so when you apply they may be willing to overlook your bad credit and bankruptcy record, and once again if you can prove to them that prior to filing bankruptcy or your foreclosure your credit was good, it’ll give them more confidence in renting to you.
Obviously once you get approved you don’t want to mess it all up by being late or missing payments. This will work against you in so many ways, since now you’re in fact working towards rebuilding your credit, so getting positive entries and good referrals are the things that you should be striving for. The last tip for making your new landlord happy is to offer to pay them rent via direct deposit, this can really increase your chances of getting approved and of course you’re creating a great referral.
