Throughout Renters Week, a real live Los Angeles property manager (not technically a landlord, but with plenty of landlordy experience) will be answering reader-submitted, rental-related questions of all natures. Got a question? Send it to the tipline. Hi,
I'm an early 30s single female film professional with excellent local references who is currently employed and making a great salary. Only problem is, some financial set-backs due to job loss / going back to school early this year caused my credit rating to tumble and I defaulted on my credit cards and I'm planning to file bankruptcy.
My question for you, dear landlord-- would you consider renting to a charming, responsible, employed young person who recently filed bankruptcy?
Or I am S.O.O.L. in the rental market?
We're both anonymous here, so I'm going to be blunt. You could charm the pants off a nun and I still wouldn't rent to you or anyone with a recent bankruptcy. That's just the way it works at my property, and the law supports an owner's right to use credit score as a deciding factor--it's not a protected category under Fair Housing laws. The law must be applied consistently too--if I made an exception for you, I'd have to make an exception for everyone else thereafter, and if I didn't, that's potentially discriminatory.
Credit scores are supposed to be an approximation of risk in extending credit or financial leeway to a person. They are certainly imperfect, but a bankruptcy in many owners' minds is indicative of someone who has made a conscious decision to not pay what was owed. Following that logic, what would compel you to pay me on time and in full every month for at least a year, when you didn't pay your banks or your credit holders?
Bankruptcy is a disastrous, nuclear option and lawyers have made a great business model out of making people think it's the only one. If you haven't already filed for bankruptcy I would strongly urge you to explore other options. Payment plans and consolidation loans (from a credit union ideally) come to mind. Bad credit doesn't mean you're SOOL to rent everywhere in LA, now and forever, amen. However, bankruptcy is a pretty big obstacle that you should avoid at all costs.
We have three factors we consider when filling a vacancy: job history, income, and credit. The first two can be slightly flexible--we will rent to someone with good credit who just started a new job, or someone with good credit who maybe makes just under the 30 percent threshold. But notice the common thread there: good credit. Remember where I said it's the owners right to use credit information? That means it's also possible to find owners who don't use it at all, or don't consider it as heavily as mine does. It's their prerogative.
My best advice:
Cast a wide net. Popular, high-demand rental markets will not be as flexible because they don't have to be. You might need to find a "hidden gem" type area with more affordable rents to make lemonade out of this situation. You're a student, so look close to your school; landlords in areas surrounding campuses are generally more willing to rent to people with shorter credit history because they know they have a captive market.
Know your score. Use a free service like Credit Karma to check it once a month (these are soft inquiries, so your score won't be affected by the regular checkups).
Be upfront and honest about your situation. Ask direct questions of the person who is showing you a unit--they should know what thresholds the landlord uses and what your chances of success are. (If they don't, that's not a good sign regardless of your score.) Don't give too many details; just say "my credit score is around XXX. Will the owner rent to someone at this level, given that I make enough money for the unit and have no evictions." You can also try turning on the charm here.
Come to the table with concessions ready. I have rented to tenants on the condition that they pay a larger deposit upfront (which is then applied to the final month's rent, per the lease). You may find that to be an effective bargaining chip. A co-signer or guarantor is also a potential option.
Good luck!
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