The task of finding a rental property while struggling financially can be scary. Perhaps you have a less-than-perfect credit history, or are unfamiliar with some of the legal terminology that landlords utilize. Relax, you do have options available to you.
In this article, we will discuss practical loan alternatives, review important legal processes such as distress warrants, and provide you with clear action items on how to make an improvement in your application and find your new home.
Loans for Renting with Bad Credit: What Are Your Options?
A low credit score may make it difficult to get approved to rent a home. There are many other ways to fund your relocation costs and give your potential landlord peace of mind about you paying your rent on time.
1. Personal Loans for Rent
A personal loan will provide you with a large amount of money at one time, which you can then use to pay for your security deposit and your first month’s rent. Personal loans are usually unsecured loan so you do not have to pledge your vehicle as collateral.
Note that rates are often higher than those of secure loans, so it’s best to compare different offers to find the most favorable rate possible.
2. Rental-Specific Loans or Guarantors
Some companies have created special types of loans that are used only to make rental payments or deposit payments. Rent guarantor services act as a co-signer on behalf of the tenant who is renting, promising to make the payment if the tenant cannot.
This eliminates the landlord’s primary concerns regarding potential loss of revenue, thereby significantly increasing their likelihood of approving the tenant’s rental application.
3. Credit-Builder Loans or Secured Cards
A Credit-Builder Loan is not a loan for instant cash; however, it allows you to quickly improve your credit score. The funds borrowed through this type of loan are placed into a bank account while you repay the loan.
A Secured Credit Card also has your credit limit equal to the amount deposited. In both cases, your loan repayment history is reported to all three credit bureaus, which allows you to establish a positive history over time.
Note: When searching for loans for renting with bad credit, it’s important to compare interest rates and terms carefully. Some may be higher than others, so take time to find the best option for your situation.
What Is a Distress Warrant? A Landlord-Tenant Legal Guide
Understanding what is a distress warrant can help tenants and landlords know their rights in eviction cases. In simple terms, a distress warrant is a court order that gives the landlord permission to take your personal items if you are behind on your rent payments.
When you fail to pay rent, a landlord can file a motion with the courts requesting a distress warrant.
If the landlord is successful in obtaining the distress warrant, they will be able to take the tenant’s personal items in lieu of paying back the debt owed. This is a major event in the collection process of back rent.
How the Process Works (Especially in Georgia)
In Georgia, the landlord files a sworn affidavit with the judge who has jurisdiction over the case. Next, the judge issues a summons to the tenant requiring them to appear before the judge.
As a tenant, you will have a very short period of time, usually 7 days, to file a response with the court. If you do not respond to the court, you may lose by default, and the landlord can proceed with an application to collect the debt owed by taking your personal items.
What You Should Do as a Tenant
If you receive a summons, do not ignore it. Read through all of the documents carefully, then respond officially to the court by the required deadline. The opportunity exists now to present your case as well. If you choose to ignore the summons, you will likely be defaulted on, which could result in loss of property or eviction from rental properties.
What Landlords Must Know
Tenants must comply with the law in the same way landlords must. A landlord must first make a formal request for rent in writing before they can file a lawsuit. A landlord cannot take self-help action, such as changing the lock, while pursuing a claim for money owed.
Civil process serves as a means for landlords to recover money owed to them; tenants do not go to jail as a result of a landlord filing a warrant. Hiring a lawyer to assist you in navigating this process would be very beneficial.
How to Secure a Rental When Facing Financial Hurdles
Financial barriers do not necessarily limit one’s ability to find housing. The following steps are simple yet effective ways to enhance your rental application and demonstrate to potential landlords that you are financially reliable.
1. Be Proactive and Transparent
Do not allow them to discover your credit issues on their own. Provide a brief explanation of your circumstances at the beginning of your written communication. Emphasize your stable income, smart budgeting strategies, and good rental history. Your honesty will establish credibility and may encourage a landlord to be more flexible when working with you.
2. Offer a Larger Security Deposit
If you have the opportunity, putting down a bigger amount could be a great way to show some goodwill. The less risk there is for the landlord in case something happens, the better it will be for both of you. Make sure you mention this in your rental application. This should help alleviate the landlord’s concerns and also possibly separate you from other applicants.
3. Provide Strong Proof of Income
Show that you are able to consistently pay your rent now. Give the landlord your most recent paycheck stubs or bank statements, or a letter from your employer indicating how long you have worked with your current company.
If your income varies, then give the landlord multiple months’ worth of records. In many cases, a landlord will accept a poor credit history because you have a stable income.
4. Get a Co-Signer or Guarantor
Find a reliable co-signer who has a great credit score and steady income and will help you financially when you are unable to do so. Your co-signer will have a legal obligation to pay rent if you don’t, so be sure that they understand what they’re agreeing to.
5. Show Positive Rental References
Get letters of reference from your past landlord or property manager stating you made timely payments, took care of the unit, etc. As long as the letters can prove you are responsible and have been a good tenant. A great letter of recommendation from a former landlord is a huge plus in proving you are a dependable tenant.
Conclusion
Finding a place to live when dealing with financial issues can be challenging, but not impossible. Using the information that you learned about your loan options and legal terminology (i.e., Distress Warrants), you are ready to put these into practice.
Now that you have an idea of what you can do to improve your chances of getting accepted for your desired rental property, use the knowledge you gained to take the first step toward achieving your goal by preparing yourself and taking the initiative to find a home.
