Can a foreclosure affect renting an apartment?

They need housing, but are often faced with a sad irony: due to their foreclosure, their credit has deteriorated, and due to their credit, they may have a more difficult time getting a rental application approved. Fortunately, the current housing climate favors the renter, and following a few simple guidelines can significantly increase the chances of successfully negotiating a rental agreement. Once a homeowner has lost his or her home due to foreclosure, it will almost certainly affect the homeowner’s credit in a substantial way.

If you have a foreclosure event, you can expect your credit score to drop anywhere from 100 to 250 points. The belief that you can avoid a negative impact altogether, by choosing an alternative type of foreclosure, is a myth. Any type of foreclosure will negatively affect your credit score.

Once you have had a foreclosure, it becomes extremely important to reconsider your other credit accounts. If you have paid regularly and on time on your other bills, such as credit cards and car loans, your credit should not take as big a hit from the loss of your home. It is also important to understand how time affects your score.

Although your credit will be heavily impacted just after a foreclosure, it will have its greatest effect for the first twenty-four months. After that time, the foreclosure will be weighed less and less in a credit determination. After seven years, the foreclosure will drop off of your credit record completely.

Because of this, the most important consideration when looking at how a past foreclosure will affect a rental application is the easiest to determine–the more recent the foreclosure, the worse its effect will be. A prospective renter should also look at his or her credit history as a whole. Some landlords will only look at a person’s credit score when considering an application.