Rent a cosigner, Really?

Anyone who has had or who now has bad credit knows what a headache it is. Not only do you have to deal with whatever hard situations might have led you into having bad credit in the first place, be it a divorce, losing your job, an illness, etc. But on top of that, you now have all of the frustrations that come along with having bad credit. It is now next to impossible for you to get a credit card or a loan for a car or home. And if you are able to get a loan, you are left paying ridiculously high interest rates.

So what is there to do? If you have bad credit, are there any options for you? You may have very simple goals... you may just want to be able to rent an apartment or house to live in! But many people with poor credit are denied the ability to rent an apartment or house because their credit is too bad. Many landlords don't want to take on the risk of a tenant with poor credit.

So if you have bad credit, is it now impossible for you ever rent an apartment? Or if you can find an apartment to rent, will you be forced to live in substandard housing because those are the only landlords that will rent to you?

Well, not if you are open to the idea of renting a cosigner.

 

Cosigners for rent

There are actually organizations that can provide you with the ability to "rent a cosigner." You can use these rented cosigners to help you be able to rent a home or apartment. These co-signing services work very similarly to a normal cosigner, say if you found a friend or family member to cosign for you. But instead of one of your loved ones having to put their credit on the line for you, there are companies that are willing to take on that risk... for a fee.

The setup process for these services is fairly simple. If you are in the process of trying to find an apartment or home to rent, but you fear you will be denied because of your poor credit, you can hire one of these co-signing services. You simply go to their website, fill out an application, and wait for your approval. If you are approved to use their services, they will send you a certificate saying that you have utilized their co-signing services. You present that certificate to your landlord. This shows them that, even though you may be considered a higher risk because of your poor credit, you have someone else (a reputable company) that is willing to step in and cover the bill should you default.

 

The downside

Now, just like with everything else, there is a downside to this plan. So, before you rush into renting a cosigner, keep this in mind. There are definite costs associated with renting a cosigner. Unlike friends and family members, these companies aren't willing to put themselves on the line for you just because of their love for you. They don't know you. They are in this to make a profit. So, they obviously charge for their services.

In exchange for their willingness to take you on as a risk (remember, they get left with the bill if you don't make your payments), they charge you a monthly or yearly fee. Typically this fee is 10% of the annual rental costs. So, if your rent is going to be $1,000 a month, that means that you will have to pay your rental cosigner an additional $100 a month or $1,200 a year. That may be a lot of extra money out of your pocket, but if it means that you are able to rent that apartment or house that you want, it may be worth it.

 

Other options

If you don't want to pay those fees just to be able to rent an apartment, you may want to put that extra money to other uses. You might want to look into hiring a credit repair company. These companies could help you to get inaccurate or misleading information removed from your credit report, leaving you with much better credit than you had before. You can then use this better credit to get into that new house or apartment that you've dreamed of.

Nicole has exerience with having poor credit, and has learned through experience how to rebuild your credit. She enjoys sharing the information she's learned with others.