How does a bankruptcy on your credit report impact your chances of renting a home? Income is the number one factor in securing a place to rent. It is just one part of your financial profile that a landlord or property manager would want to know about. A credit score and credit report is also an important part of your financial profile for a landlord. If your credit score is low, a landlord may recognize that you have a history of not meeting your financial obligations. Whether or not the low credit score is attributed to bankruptcy may not be the most important factor.
A credit score consists of several factors combined to come up with a number that is accurately representative of your financial history. A credit score considers late payments, on-time payments, credit inquiries, bankruptcies, foreclosures, etc. Having a bankruptcy on your record may be a part of the impact on your credit score, but if you already have negative marks on your credit report, it is certainly not the only factor impacting your credit score. Avoiding a bankruptcy due to your credit score is not always the best decision. Not all landlords will view a bankruptcy as an absolute rejection of your rental application. A landlord who sees that you have eliminated all of your outstanding debt via bankruptcy and show consistent income could be attracted to the fact that you have no outstanding debt and you will be able to focus your income on the rental expense. A bankruptcy can reduce your debt to income ratio to a very low risk factor. Landlords will recognize this and a landlord may also recognize that you will not be capable of escaping collection of rent because you will not be able to file a bankruptcy until 8 years after your last one was filed.
Larger companies who manage condo communities or corporate managed rental properties are most likely to reject a rental application with a bankruptcy, but the number of private owned rental properties has increased significantly over the recent years. A private owner of a property will usually have less strict guidelines and will have the time to look into your personal situation to evaluate you as a rental applicant. So, if avoiding a bankruptcy will leave you with a significant of consumer debt and expenses that use your income, be ready to continue to have a difficult road to paying high rental rates and paying high debt interest payments also. If you can use a bankruptcy to lower your monthly obligations, you will be able to more easily afford your rent in the future.
Not all rental organizations, property managers, or landlords completely reject rental applicants who have bankruptcies on their records. There are some who will not accept applicants with bankruptcies, but there are also many private owners and organizations that would rent to someone with a good income history and good rental references.
Bankruptcy Law Professionals has locations in Riverside and Orange County to serve you. Contact Bankruptcy Law Professionals to schedule a FREE consultation at (855) 257-7671 with our Orange County bankruptcy attorneys or Riverside bankruptcy attorneys.