I am in credit hell right now.  I am trying to rent a house so that we will have enough room.  My husband and I both are independent contractors and we don't have health insurance so we have several items on our credit report which have not been paid due to hospital visits.  We pay our rent on time, and are good tenants, but if given a choice between food and rent, or paying some outstanding bills, well, I think you can guess which wins.  However, we have never been evicted, nor asked to leave, nor gone into bankruptcy.   We have offered to pay an extra deposit, establish an escrow account, and get a co-signor and none of these seems to be appeasing to the landlords.  The last place we looked at is going to lower the rent to the house so they can have a wider pool of applicants rather than take a chance on us!  Please help with ideas, and don't tell me to pay them off because right now I don't have eny money to do so.  I am feeling deperate because in two weeks, we need to be moved from where we are currently.  Please help me!!

You should contact a credit repair org that will negotiate with your creditors easy to manage payment plans.  Bottom line is that if you have to choose between rent and food, something is not right.  If you are paying your rent late you are not a good tenant.  Never having gone into bankruptcy or not having been evicted is not the only aspect to being a good tenant.

Either you are renting a place out of your budget or your food costs are through the roof.  You should stop using your credit cards and start paying for everything in cash.  Live within your means, stop buying things you cannot afford and everything will begin come into balance.

where are you looking?  right now it's a landlord's market in tight places like SF.  Someone told me vacancy rate is back up to 96%. my building super just told me one of the identical units in my apt building is going for $250 more than my unit. OUCH.

At the height of the last rental squeeze, people were getting letters of recommendation from their prior landlords, maybe try that if your credit history isn't so clean.

I have almost paid off all of my credit debt (now under $2000) and don't use cards, and I said that my first priority is rent and food-not that I don't pay my rent on time.  We don't go out to eat more than a few times a week at a super cheap place, I haven't bought new clothes in I don't know how long, we haven't been on a vacation in 5 years, and we don't buy luxury items.  And we are making enough money most of the time but if one of us is out of work, then we switch to paying only what is necessary-that being rent, food, utilities.  And I have given letters of recommendation from previous landlords but it still hasn't born fruit.

Oh, and at this point we are looking anywhere within a half hour to 45 minutes drive to SF, but preferably East Bay because I work in North Berkeley.

Move to Oakland - watch your rent drop by half.

It seems like you are doing everything right, I guess you should just keep at it and make sure you keep your activity level high in regards to finding a new place.  Have you considered looking outside of the immediate area you are looking for?


culinary o. says:

I have almost paid off all of my credit debt (now under $2000) and don't use cards, and I said that my first priority is rent and food-not that I don't pay my rent on time.  We don't go out to eat more than a few times a week at a super cheap place, I haven't bought new clothes in I don't know how long, we haven't been on a vacation in 5 years, and we don't buy luxury items.  And we are making enough money most of the time but if one of us is out of work, then we switch to paying only what is necessary-that being rent, food, utilities.  And I have given letters of recommendation from previous landlords but it still hasn't born fruit.

Have you been looking at Craigslist?  I see a lot of rentals in that area.

I also have bad credit and had a difficult time finding a place. Luckily, I found a place in Richmond. Consider Richmond, it's cheaper and landlords are more willing to work with you. I'm almost positve my landlord never looked at my credit. I'm in 2brm for $980. Large year, Washer and Dryer.

unfortunately, there is no quick way to fix your credit. It'll take years to get it back up. Susie Orman (financial expert) did say you can fix it rapidly if someone with good credit puts you under their credit card. I totally recommend getting one of her books. She makes finances easy to understand.

how many rooms, how much and for how long are you looking to rent?

I sent you a message, culinary. Good luck!

Second for the genius that is Susie Orman

Unfortunately paying certain bills and not others is going to result in bad credit and there is no quick fix for bad credit.  My best recommendation would be to offer 2-3 months rent up-front.

In the future if you don't want to pay medical expenses right away I would suggest having either the hospital or a finance company set up a payment plan and just making the minimum payments.

Owing money and ignoring a bill destroys your credit, but owing money and making small payments on time actually improves your credit.

First, be upfront about your troubles when you're filling out your application.   Let them know that you have excellent landlord references and never pay rent late or that you've never been evicted.  SF is a rough rental market made harder by poor credit.    Try to go through landlords instead of agencies who will automatically deny you based on hard criteria whereas a landlord will take YOU into consideration once they meet you and will let their instincts be their guide.  Also, offering to pay extra deposits will help.

Once you get a place really work to repair your credit.  Watch the movie Maxed Out - it will make you angry but also make you understand why good credit is so important.  

I was in your boat once. . .because I didn't believe in credit and paid cash for EVERYTHING . .thinking no debt = good credit.  WRONG.  You need some credit and the ability to manage it well.  

Good luck!  Oakland is a great renters market so I think you'll find you do better here.

sounds like your SOL

2bdrm, 1 ba with yard and garage  $1650/mo max and allows a cat.
We've looked in Richmond, San Pablo, and El Sobrante.  I haunt craigslist and have posted a notice looking for a place.
We want a place where we will live the next 5 or 10 years as I don't see owning a house a possibility in the near future.

I will definitely get Suze Orman's books.
Thanks for the suggestion

Do NOT call any so-called "credit repair" organizations. They are 99.99999% scams.

Thanks Bob!

Rachel, that's what I've heard so I'm afraid to use any of them!

claim bankruptcy and say the interest rates are so high that you are trapped and enslaved in debt

Is bankruptcy worth it for $30,000 worth of medical bills?  Can I get my student loans taken care of too?

Very, very difficult to discharge student loans in bankruptcy.  Not impossible, but very difficult.

Student loans cannot be filed under bankruptcy.

Otherwise, everyone would be doctors with bad credit.

A couple years ago the bankruptcy laws were ridiculous, you could do whatever you want and go bankrupt and not owe anyone anything and get some decent credit relatively quick.  Unfortunately for you  in 2k5 or 2k6 they cracked down on the bankruptcy laws and now you still gotta pay most of what you owe.

No, you can discharge student loans in bk...but you must show that repayment imposes undue hardship.  I believe courts can now partially discharge student loans.  Regardless, it's not easy to discharge them.

Not sure re medical bills.

Here is some Richmond Affordable housing. It's updated on a regular basis. Give it a try.
ci.richmond.ca.us/Docume…

a reputable credit assistance agency is Consumer Credit Counseling and I think they really help getting people who you owe money to off your back and minimize the impact e.g. reduction in late fees etc...

another tip is that hospitals will frequently break up what you owe into smaller chunks if you ask.  

I also like Suzie Ormon.  

And you are so not SOL :)

You can also ask hospitals for discounts. Sometimes they have discounts for uninsured people, and they have money that people donate, which you maybe able to access.

Thanks guys!  I will definitely check all of this out.

call your collectors and set up a payment plan, small monthly payments even $50/mo will show you have attempted to payoff debt... that reflects positively on your credit and to your future landlords, good luck!

Give me your social security number.

And a hammer and some duct tape.

You're credit issue is one thing, finding a place to rent is another.  Credit repair agencies are mostly scams.  Take the time to learn the ins and outs of credit, what helps your rating and what does not.  You can often negotiate with someone to whom you owe money that they will remove your negative credit reference as part of the settlement.  You can't do that with financial institutions but you can do that with collection agencies, e.g. on medical bills.  More issues than I could mention here.

You're trying to get a rental and many rentals want good credit refs.  Nothing you can do about that.  Deal with private parties rather than big buildings and agencies, work with people you know, take over someone else's lease or sublease, go in with a roommate, etc.

I have the same problems as you...not as much debt but a nice chunk to see me through the next few years. As a teengager I paid none of my bills, and man, do I regret that. I was lucky enough to find a great apartment with a landlord who didn't run a credit check. I'm always on time and never let a check bounce with him. Don't want to mess up a good thing. Too bad my place is too small for you and your family...I'm moving out at the end of August.

Ok now it sounds kind of like I let other checks bounce...but I don't. I am just super aware of the checks I write my landlord. Like constantly watching my bank account till it clears.

Consumer Credit Counseling saved a good friend of mine several years back. She was running her own business but didn't know how to get paid promptly by corporate clients and fell into the credit card debt cycle. CCC worked with her and helped get her out of 40k of debt in 3 years.

I was in 20k of debt myself back in 2000 but buckled down hard and paid it all off by 2002, without using CCC.
Haven't used a credit card since. I learned that no matter how little I have in day to day reserve, It's far better to get paid interest for what you put aside than to pay it out on what you borrowed.

Quit all of your jobs and work under the table.  they can't take from you what you don't have.  Ok, maybe not the brightest idea.

Don't live in Richmond, it's dangerous.

A goldmine of information:

creditboards.com

This is a big site with a lot of information.  However, you must do a bit of homework and legwork.  Pay special attention to the tips on how to work with creditors, credit reporting agencies, and credit card companies.

This is not going to improve your credit rating in 2 weeks but you need to start working on your credit situation overall.  It may take you several years to clean it up but if you start now and act wisely you can make great strides.  A family member of mine went through the same thing and this site was a huge help in that process.  But you have to read and act on the advice they offer.

At the height of the last rental squeeze, people were getting letters of recommendation from their prior landlords, maybe try that if your credit history isn't so clean.
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Or forge one and make a "fake" credit report.  (just kidding)

Disclaimer: I am not giving advice.  I am not offering a suggestion.  I am only making a (hillarious) joke and will not be legally bound to the above statement.  I do not endorse the idea of breaking any law and would reccomend you follow the law to the letter.  That way we can all play nice and all have a fair chance.

I can't believe no one has suggested a secured credit card.

My credit was terrible - lots of charge-offs totaling thousands of $$. Really bad. But fortunately I never filed for bankruptcy.
I heard about a secured credit card ($300-$500 deposit, which forms your credit  ard limit). My parents helped with that, I charged stuff like groceries on it and always paid it on time and in full. A year later it morphed into a "real" credit card, and shortly after that I got an application for a major, frequent-flier mile earning credit card. I applied and was approved (hooray); they even asked me if I wanted one for my business (which unlike me had sterling credit), I said sure.

I have never missed a payment with them since, they raised my credit limit, I got other credit card offers in the mail, some of which I applied for, and I have never been turned down since. In November I moved back to SF and needed a credit report. When I got the results I was quite pleased with the rating (in the 'excellent' category).

Sure, work with CCC (I did for awhile years ago) but get a secured credit card. It really helps to re-establish (good) credit history.

I deal with credit reports, FICO scores and everything related for a living.  You aren't going to be able to do much in the next few weeks so you're going to have to work with what you have in finding a new rental.  Be straight up, offer an increased deposit and don't be picky about the property.  Landlords have the upper hand right now as there are plenty of tenants to go around so you're going to have take what you can get and then work to improve your credit so you can hopefully move into something nicer when the lease runs out.  You can do alot in 12 months to repair your credit.

First thing you need to do is DISPUTE, DISPUTE, DISPUTE.  Someone mentioned this earlier and I highly recommend it as well.  Dispute everything, even items that are legitimate.  From there, work on all the open collections items.  Contact the original creditor for every collections item and see if they will take the account back from the collection agency and allow you to make payments.  Tell them that you need it removed from your credit report when they contact the collections company to take over the debt.  Basically let them know that you'll make payments, but only if they get it removed from your credit report.  At the end of the day, all they want is to be paid and they will often agree to have it removed if doing so will result in some sort of payment.

IMPORTANT!!!!  When something goes to collections and it is listed on your credit report, it is still going to negatively impact your score even if/when it is marked as "paid".  Therefore, it is imperative that you get a letter saying that it was reported in error as this is the only thing that will get it removed and will eliminate any negative impact it is having on your credit score.  I can't stress this enough.  

You need to keep in mind that it took a long while to destroy your credit so it's going to take some time to fix it.  You need to keep precise records of everything you dispute and make sure you keep track of dates and times that you call/fax/mail anyone related to this.  Dispute what you can via e-mail and set a "delivery" and "read" confirmation and then keep copies of the confirmations so you can prove what you've disputed.  They basically have 30 days to respond to anything you dispute so proving dates you send in certain items will become critical.

Best of luck to you.  You can resolve the issues on your own and without spending a ton of money on a credit repair service.  Many of them are in fact scams, even those that are "non-profit", so be very careful before agreeing to any sort of credit counseling services.  Many in my business are anti Suze Orman, but I'm not.  While her advice is on the conservative side, I believe if that if more people handled their money as she recommends, there would be alot fewer people in my office in horrible positions because they got in over their head.

Move to Berkeley.. i believe rent there is relatively cheap. My best friend rents a full house - 2 story with three bedrooms for about $1100 that he shares with one other person.

Stop working as a contrctor and get yourself a REAL 9-5 job that offers health insurance and all other benefits like 401K cause clearly this contractor biz is not working for you AND your husband. SO at least one of you should hgave a real 9-5 job.

Disputing everything negative in your credit report is absolutely the right way to go - it shifts the burden of proof to those reporting the negative information, and if they don't reply in 30 days it's gone.

However, in many cases if they are still in business, they WILL confirm the information.  Years ago, it was a good bet that any dormant account information would be filed away physically on a backup tape or similar, once it was a few years old.  But these days, storage is cheap and it's likely that this sort of archival no longer takes place.  So for those items that you can't successfully dispute, only time will heal the black marks - 7 years since the last late payment, typically - so definitely DON'T make any additional payments on any "sleeping" delinquent accounts, or you'll just restart the 7-year clock.  It's perverse, but that's the way the credit bureaus work.

So realistically what you're looking for is a landlord who won't run a credit check, which generally means small mom-and-pop landlords - you'd be surprised how many, even with buildings in nice neighborhoods, are too cheap or can't be bothered.  They may make you fill out an application for one, but in many cases they won't actually run the credit check.

Barring that, if you have enough cash on hand you can try offering a larger deposit than usual, or maybe offer to pay for a full year up front, but even then, they might not want to take the chance.

J.b. totally nailed it.  Take his advice on dormant accounts.  It is absolutely true that paying on these accounts can actually hurt your credit.  Crazy, but so true.

Also, is there anyone in your family that can co-sign for you?  Some landlords will allow a non-resident on a lease if that person is willing to take responsibility for making sure the rent is paid.

There is something to be said for NirvAnna's advice too in that sometimes having a regular steady income makes managing money and credit a whole lot easier.

Cynthia B. says:
Don't live in Richmond, it's dangerous.
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This is BS. There are some area's that are dangerous (like many other cities). But, you can find really nice quiet, and safe areas. The hilltop mall area has brand new townhouses and apartments. Point Richmond is nice, a bit pricer. My area is near the railroad and all the houses down my street have been renovated, and my neighbors are great people. It's way better than where I use to live in the Canal (San Rafael)...way better.

Thanks guys- I went to see a house today-not ideal but it will do and I think the owner will rent to us.  She did say she was running a credit report but we already told her our credit sucks so, I told her I would do whatever made her feel most comfortable to rent to us, including get a co-signer.  This place is in the Laurel District of Oakland and is not too bad.  Once we have a place, we will be able to continue working on our credit.  We've both had 9-5 jobs and in spite of the difficulties now, we like the amount of time we are able to spend together when we work as independent contractors.  (As well we get paid much more hourly)
Thanks guys for all of the thoughtful and helpful suggestions.  You guys rock!

That's great news, but don't let this minimize your motivation to fix your credit.  Start working on it now so it's better when you need to use it again.  It's definitely not something you can fix overnight.

Glad to hear that you got a place. :P

I'm glad this was resolved but I wanted to add my own thoughts because maybe they will help someone else reading this down the line!

I've been in the position of sacrificing bills in order to pay rent and food countless times. I can't say enough for Debtors Anonymous. It's a free, peer-led program for anyone who has issues with time or money. Before, I felt like I just couldn't help getting into situations where I wasn't making enough, or wasn't able to pay my bills on time. A lot of the time, I was afraid to look at my bills or my bank account even when things were good because it had been painful so many times in the past. And I ended up carrying the same fear into my work - there have been so many times when I only looked at or applied for the jobs that I thought I could get, because it was scary to go for something more challenging or that paid more and I just assumed I would never get it. I've learned so much there about dealing with the underlying issues that have wrecked my credit and led to underearning and all this other stuff. And like magic, I am discovering that when I refuse to pay my bills late or not take care of my needs, or accept jobs that don't pay enough or are below my skill level, other options become visible to me. They're not always easy to find or easy to take, but they're there; whereas I used to actually believe that it was possible to only have one option, or two options, like either pay my rent or my bills this month. It's crazy to me to find that that's not true AND that I don't have to shame myself for having made those choices in the past.

I've been working on rebuilding my credit over the past couple of months and here are some things I have learned:

- It's really important to get copies of all three credit reports. I thought my credit was much worse than it was. I mean, I wasn't getting approved for any credit cards, but I thought that all my utilities would show up on there as not being paid on time, and that every collection agency would have shown up on there. Turns out that the reality is that it costs money for companies to report people to collection agencies, so (1) a lot of them don't (and a lot of billing people don't know that or else are told to lie and say you are destroying your credit if you don't pay them) and (2) the ones that do often just report to one of the agencies. I've found things on my credit reports that really didn't belong to me and had them removed easily (you can even just click a "dispute" button online usually on the credit report website) and I'm in the process of giving them statements to put in my credit report about a charge that is "mine" but that was unfair.

- Debtors Anonymous has really good information about how to negotiate with creditors so that you are only paying them what you can - instead of getting into a spot where you are trying to pay so much debt off that you are struggling to take care of your basic needs, or being asked to pay more than you can really afford so you end up making late payments and messing up your credit.

- I think medical debts can also have unique problems like... if you didn't have insurance at the time, the hospital may have charged you much more than they would have charged an insurance company, which I believe is illegal. It's worth getting all the information about this stuff that you can, if you haven't already, so that you know if you can lower that debt at all.

- I guess secured credit cards can lead to real credit cards, but they usually don't report to credit agencies so they don't repair your credit by themselves. I have found one REALLY great thing that I think is going to help my credit a lot: prbc.com. It's short for Payment Reporting Builds Credit. Basically, you sign up with them (free) and give them all the information about your bills/loans/etc., and then you can pay $15 for each account to have them "validate" it, which means that they contact the company and I guess confirm that you are paying your bills on time and then they TELL THE CREDIT AGENCIES. You can even use them to pay your bills online, which i think makes it all easier. Maybe it just makes it easier to pay them on time, I don't know. I am excited about this because I am finally paying all my bills on time and I want that to count in my favor, damnit!