How Does Rent to Own Work with a Bad Credit History?

Tools and debit card stacked togetherIf you have bad credit history, you’ve probably found out the hard way that obtaining a traditional loan isn’t as simple as many people think.

Luckily, there are other options to become a homeowner, and renting to own is one of the most popular.

Many people ask, “How does rent to own work if I don’t have the best credit?”

Renting to own gives you the chance to improve your credit report over a reasonable amount of time, all while getting money credited towards the down payment on your home.

If you decide that rent to own is the ideal option for you in Florida, for example, there are a few things that you can do to build your credit up.

Identify Problems with Your Credit Profile

The first thing that you need to do is to get a copy of your credit history. There are many resources online which can get this for you for free, and others will provide invaluable services for a small fee.

Once you have a copy of your profile you need to go through, line by line, and ensure that everything is accurate. Sometimes things are incorrectly entered into the reports and they are easy enough to clear up if reported professionally to the credit bureau or offending company.

At the same time, make sure that all positive entries such as loan payments and installment contracts are reported on there.

Repair as Many Negative Entries as Possible

After you have the list of legitimate entries, try to clear up as many of the negative ones as possible. Negotiate with unpaid accounts which are bringing your score down – oftentimes these companies will be willing to settle for significantly less than you owe them.

Make sure that they will agree to remove the negative entries from your credit profile when payment is made. It’s understandable if you’re not able to get all negative entries removed as some may be too expensive or otherwise impractical – by cleaning up as much as you can you will likely see big jumps in your credit score.

Create Good Credit Entries for Yourself

How does rent to own work with poor credit? It works because as soon as you are able to, you should start building positive credit for yourself.

With most rent to own properties you have one to three years to get your credit up to par. That means starting to build credit as quickly as possible through the on-time, full payment of credit cards and other monthly bills. Try to vary your credit accounts across a wide range of fields such as personal loans, utility bills, credit cards and auto loans.

By keeping a positive track record on your credit profile, you will quickly see an improvement in your overall score.


With these three tips, there should be little reason to wonder how rent to own works with any credit situation.

It involves you finding the perfect house and having the opportunity to improve your credit while living in the home.

For anyone with less than an optimal score who wants to become a homeowner, finding a rent to own property is a great way to get on the track to home ownership today.