Rent To Own Credit Issues

One of the main reasons that people seek a Rent To Own or Lease / Purchase home is credit issues. A good candidate for a Rent To Own home is a person who has credit issues that can be resolved in one to three years. Don’t just wait for your credit to fix itself. It takes time and attention to make a difference in your credit score.

If you have had a recent foreclosure consider a longer lease period. Rent to Own Homes are a great alternative for buying a home after foreclosure but remember that your lease period should be used to re-establish your credit.

The first step in the Rent To Own process should be obtaining a copy of your current credit report from all three bureaus. These are listed below:

Experian P.O. Box 2002 Allen, TX 75013 (888)397-3724 Web site: www.experian.com

Trans Union P.O. Box 2000 Chester, PA 19022 Web site: www.transunion.com

Equifax P.O. Box 740256 Atlanta, GA 30374 (800)-685-1111 Web site: www.equifax.com

You can obtain these at no charge annually from each of the bureaus. Knowing your credit score is not enough. You must also know which items on your credit report would prevent you from obtaining standard financing. Your ability to qualify will ultimately be determined by the lender that you decide to use.

One other thing to keep in mind is that lender credit requirements change. During the peak of the sub-prime mortgage era almost anyone could qualify for a home loan. Now with widespread lender losses occurring the requirements have tightened substantially.

It currently requires a minimum average credit score of around 620 to qualify for a standard home loan. This is only one factor that lenders use to determine your eligibility. Lenders do not want to see late payments within the last year on credit cards and current loans or bankruptcy or foreclosure within the last three years. A chapter 13 bankruptcy may be accepted if the payment plan has been paid as agreed for 12 months.

Tax liens, judgments, and child support must either be paid or have a payment plan that has been paid as agreed. All of these factors are only general guidelines and vary form lender to lender.

To be sure about your chances of qualification you should make an inquiry about your ability to qualify periodically with a local lender. FHA loans can be less restrictive that a standard mortgage. You may want to start there. Other factors that may influence your loan approval are length of employment, income, other debts, self-employment, and the amount of the loan.

In order to insure that you will be able to purchase a Rent To Own home at the end of the lease period you should monitor your credit and take the necessary steps to improve your credit score. There are a number of services that will work with you to accomplish this. Using a well know law firm in the process of your credit repair is highly recommended. Your credit-monitoring program should be in the hands of experienced professionals to get the best results.