With so many houses in foreclosure now, tenants as well as homeowners need to be concerned. While the bailout terms may help some homeowners retain their homes, there’s no indication that income property will be saved. And, with so many rental units standing vacant, there’s a good chance that many landlords will be forced to relinquish their holdings to foreclosure.
That’s a very good reason why tenants should be checking their credit reports and doing all in their power to get scores as high as possible right now. After all, if your landlord is in financial difficulty, you may be the last to know.
Homeowners get written notices long before they’re asked to move out, but as a tenant, you may not get notice until someone comes to tack a notice on the door. At that point, it may be too late for you to work on improving your credit scores.
The good news, for some, is that Fannie Mae and Freddie Mac are working with tenants to allow them to stay in homes while they’re being offered for sale. The bad news about that is that you can expect potential buyers to be traipsing through the house – and in some cases you can be faced with Realtors who are none too happy about your presence.
Realtor organizations are right now protesting the Fannie and Freddie decision – saying that the presence of tenants makes it much too difficult to show and sell a home.
You may be thinking “Why do I need better credit scores? I’m not going to buy a house.” Well, the truth is, rental managers are now checking credit scores too.
They have an obligation to their property owners to find tenants who will pay the rent on time and take good care of the property. And they believe that your credit score is an indication of how you will perform as a tenant.
You may have some small signs that your landlord is in trouble – things like an unwillingness to repair small things. But perhaps you haven’t needed repairs.
If you’re concerned, you can go to the public records with your home’s legal description and check to see if any proceedings have been filed against it. You may also need your landlord’s name. If you don’t know it, or the legal description, ask the rental manager.
Meanwhile, as a precautionary measure, get your free credit report, check your credit scores, and begin working to increase them. Even if you don’t need to move in the near future, high scores will help you if you need to buy a car or want to change jobs.