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Vets, debts and rental apartments

Dear Steve,
Hi! I am a woman serving in the U.S. Air Force. Currently, I am stationed in Misawa, Japan. However, I will be returning stateside in May and will need to find an apartment to rent upon my return. I am currently on the long road to recovering from bad credit. I understand that a poor credit rating can lessen your chance for finding rental property. Does being in the military (they more or less force one to pay rent bills on time) help negate the consequences of this situation? Are there any rental agencies/steps you would recommend I take to help me with this situation? Thank you for your time! -- Kristen

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Dear Kristen,
My hat is off to all of you who are helping to keep our country free. You deserve better than bad credit; so let's see what we can do! You are correct that a poor credit rating can affect your ability to rent property. It can also affect your military security clearance, future employment opportunities and even your ability to obtain insurance.

According to the Fair Credit Reporting Act, if an adverse action such as denying you a rental is taken due to the information provided in your credit report, the person or company taking that action must provide a pre-adverse action disclosure that gives you access to a free copy of your credit report and "A Summary of Your Rights Under the Fair Credit Reporting Act."

Now that you have the above information, let's discuss how you can get into an apartment when you get back to the states in May. The first thing you should know is that many people have dings on their credit history and apartment complexes would be empty if the only people allowed to move in had stellar credit. Also, many smaller landlords do not pull credit reports at all. With them, your uniform and a deposit may be all the credit you need!

You state that you are "on a long road to recovering from bad credit." If that means you are paying your debts on time and not adding to your current debt load, the on-time payment history you are establishing may have already gone a long ways toward improving your credit history.

Here are the steps you requested:

1. Obtain your credit reports from all three credit bureaus and check them for accuracy as soon as possible. Dispute any inaccurate information and make sure you have done everything you can to improve the 'bad' spots. As an example, pay any charged off accounts where possible and bring any late accounts current.

2. If you are currently renting in Japan, get a letter from your landlord recommending you or at least saying that you have been paying on time and have been a good tenant. Whether you are renting or not, ask your commanding officer for a letter of recommendation that indicates your good character.

3. When applying for an apartment, be honest about your less-than-perfect credit history if asked or if you are told a credit report will be checked. Being upfront with your potential landlord may move you from the 'bad' risk to 'good risk' category.

4. Landlords are often more interested in your previous payment history with other landlords than your credit history in general. Your military service may be just the ticket to reassure a potential landlord that you will honor your rental agreement.

5. Be aware that with your credit history you may be offered an apartment, but with different requirements than other renters. You may be required to put down a larger deposit or pay a slightly higher rent than another applicant. Before signing a lease, be sure you understand all the terms and then decide if those terms are acceptable.

Good luck Kristen and welcome home!

The Debt Adviser, Steve Bucci, is the president of Consumer Credit Counseling Service of Southern New England. Visit CCCS for additional debt advice or click here to ask a debt question.

-- Posted: March 5, 2004




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