Please help Laurel find a home by answering her questions

I can't find a better place on the internet to ask, considering that you have to wait a week to post questions to AskMeFi.

I need to rent an apartment but it looks like I'll need a guarantor. After that guarantor has signed my lease and taken on the responsibility, will my rental obligation show up on their debt-to-equity ratio? Or is it invisible until and unless I default on my rent?

Come to think of it, does a rental agreement show up on MY debt-to-income ratio as long as it's paid on time and in full?

I don't think guaranteeing a rental lease shows up on any one's credit rating or is reported, especially in the case of an apartment, because there isn't a transaction to report, unless you default and it goes to collections. It is probably different in the case of businesses renting fancy office space or a situation where the dollar amounts are higher or the lease contract is a long one.

Is there a special circumstance according to which you need a guarantor?

does obligation to pay rent even count as a debt? you haven't borrowed anything. i don't know how it works at all but now i am curious

My credit sucks, apparently?

Also I'm hearing through the grapevine that it's kind of a penalty for being two female roommates -- that married couples usually aren't asked for guarantors. I guess because of an expectation that they have something invested in the arrangement?

The answer to my original question kind of determines whether my potential guarantor will be AT ALL willing to do the deal.

None of the apartment/house rental leases I've signed over the past 10 years has ever turned up on my credit report, nor have either of the leases I co-signed for others. I think leases are not actual debt, but are contracts (like a gym membership, which also doesn't show up on a credit report).

sarahel, may I ask in what capacity you're answering my question? If you say "mortgage broker" or similar, that might actually help me!

xp Jaq! You dear.

xp libcrypt: some landlords require a guarantor because they want to make sure they could collect the rent if the tenant defaults, or if the tenant decides to leave early but according to the lease terms, they're still liable for the rent for the entire lease term. I've had to get a guarantor for a lease before. Ironically, the landlord sold the building to developers who demolished it before the lease ended.

xp harbl: it depends on the terms of the lease.

I'm just kind of surprised at the guarantor thing because I've never needed one myself. I'm trying to think of a way to blame the credit crunch on this and failing.

Er, "for this", not "on this". Laurel, it's not yr fault that the economy collapsed.

my parents have always been cosigners on my leases and nothing has ever happened to them. also, I have always paid my rent. ymmv

Also I'm hearing through the grapevine that it's kind of a penalty for being two female roommates -- that married couples usually aren't asked for guarantors. I guess because of an expectation that they have something invested in the arrangement?

Are you going to have to have a male relative be your guarantor ?!?

yeah either way you could just tell your potential co-signor nothing bad will happen to them, and just pay your rent

not that you weren't gonna pay it just saying

xp Laurel: I do bookkeeping/accounting for a day job, and have had to lease commercial property for an arts space I run (one which required a guarantor - because we're all poor and don't own houses, so we had to get someone's parents who owned a nice house with a bunch of equity to guarantee the lease).

I think, lib, it's because a) we don't have good credit scores, b) I don't actually have or use ANY credit or credit cards, so I have no debt but also no fallback cushion, and c) anyone can lose their job at any time in this economy so landlords are nervous.

TRZ, no, anyone with income over a certain amount is allowed. The gendered part is apparently that landlords think a roommate situation can fall apart without warning as neither party has much reason to stay in the arrangement if it goes sour.

Laurel, if it helps I can ask another ask metafilter q in "4 days, 17 hours, 42 minutes, 55 seconds". happy to ask if you're still stuck.

It's not about whether I pay rent or not, it's that my potential guarantor is working on their personal finances at the same time, and can't afford to have MY $18,000 a year debt show on their debt-to-income ratio. Or whatever it is that banks and lenders use. Not sure whether the rent will, let's say...cast a shadow on one's credit or available equity or whatever.

xp haha thanks

xp libcrypt: It depends on the landlord. I've had apartments where the landlord didn't even run a credit/background check. Probably places owned by corporations or that have professional property management are more likely to require guarantors and such. They're also more likely to require these things for longer leases or more expensive properties.

Laurel, one thing that can possibly happen to the co-signer/guarantor is if your prospective landlord does a credit check on them, that can negatively impact their credit score for a few months.

Ding ding ding on the management company score. We're looking at big buildings so they seldom have private owners. This whole thing has been SUCH an education for me in so many ways. Including that small claims court case that I have to dismiss.

xp Jaq, thank you again. Yeah, they would definitely check the guarantor's credit, and right when they're trying to get their own loan. That's the kind of thing that could make it impossible.

Does a single inquiry really hurt you?? Because I've had two in the last two months, both for apartment applications.

I have also read most of the Fair Credit Reporting Act more than once. Or even twice. Not as interesting as you might think.

Although surprisingly comprehensible for a legal document.

i think you can have multiple inquiries without penalty as long as their all within a certain time frame.

I don't actually have or use ANY credit or credit cards

I didn't have one til the mid '90s, and a prospective landlord once pointed at me after doing a credit check and said "You don't exist."

It's probably better for you to have one, barely use it, pay on time, just for your rating.

Yes, I know this NOW! Actually I knew it before, but I didn't bother and didn't really want to use any credit anyway. :( So I didn't do it.

Ah, I've had credit cards for a long time and paid them in full each month, so maybe that's why they never asked me for a guarantor.

yeah, i once had a credit check where the landlord said i had NO credit... which was odd because i'd had a credit card for 4 years at that point, as well as student loans.

not to mention utilities, etc.

maybe i don't exist?

sometimes i pay my cable bill really really late because i like when they send me a letter in a bright yellow envelope. is that bad?

other than that i have student loans and i might get a credit card soon just to use it for groceries only and pay it right away for this specific purpose

Student loans also go on your credit rating.

But yeah, Laurel, I'm guessing that based on what you were saying about two female roommates vs. married couple that they're concern might be more about leaving early as opposed to ability to pay rent.

xp tehresa: I have my student loans on autopay and my credit rating is surprisingly good considering I regularly got collection notices for two separate things. I checked mine a while back and the parking tickets in collection weren't on it.

Student loans go on yr credit rating, but every broker I've spoken to says that landlords are entitled to request a different kind of report from the reporting agencies: it doesn't have your usual kind of credit score, that it's primarily to show your total indebtedness. And there's a numerical score from 0-1000 based debt and your rental history. Supposedly late utilities and student loans aren't weighed much, if at all, in this kind of thing? So I have been told multiple times.

Brokers and owners usually ask right off the bat, "Have you ever been evicted? Have you ever been to tenants' court? Have you ever declared bankruptcy? Okay, shouldn't be a problem, let's run some numbers" and then they come back with crazy requirements.

pretty sure late payments on cable and the like isn't a big deal---*pretty* sure it doesn't go on your credit score until they actually contact a debt collection agency. i, for instance, had a hospital LOSE my insurance information once and they never got in touch w/me to sort it out and it wasn't until a year later that i heard from a collection agency (and even then it hadn't been "reported")

Also I know we're entitled to free copies of our credit reports since they were used to decide not to rent to us -- this is what's known as an "adverse action" and entitles us to free copies from the reporting agency. It's the legal responsibility of the mgmt company to give us contact info for the reporting agency, under the Fair Credit Reporting Act. However they're ignoring our requests and acting like I'm a crazy liar for quoting the law to them.

Do I srsly have to get an attorney to send them a letter to get a fucking toll free number out of the bastards? Anyone? Anyone?

Fuck I hate this.

Get your report online.

Haven't you seen those stupid annoying FREECREDITREPORT.COM ads? Note: credit report may not include yr credit score, which may have to be acquired elsewhere (also online). I finally got mine this fall.

do not use freecreditreport dot com!!!!!

oh no why

yeah you can get copies from all 3 services for free once a year

this is where you go

https://www.annualcreditreport.com/cra/index.jsp

NB I didn't, i used equifax or something

freecreditreport is not free, they will charge you 14.95 a month for "monitoring" or something; is a scam

ok soz, loz

you have to cancel within X # days, is the deal. I used a different site that did the same thing and ended up eating 14.95.

yeah but they make it super hard to cancel even within 14 days, i dunno. i did it. i am ashamed.

luckily in the future there will be no credit

only zuhl.

oh wait shit i think maybe i did the same thing???

ditto Que, use https://www.annualcreditreport.com/cra/index.jsp

I actually use another credit monitoring service but I'm not sure how to read all the parts of my report -- it's confusing. I pay for that service, though. I don't mind, because I'm still in an ongoing apartment search and this tells me when prospective landlords ACTUALLY check our credit, and when they just pocket our application fees and don't even run the reports because they have an applicant ahead of us anyway.

ALSO I paid something in full back in February and it was FINALLY posted to my credit history on 4/1 but somehow it hasn't affected my scores AT ALL??? This whole system is so well and thoroughly fucked I think I will never get ahead and I will be homeless and never a grown-up ever.

ditto Que, use https://www.annualcreditreport.com/cra/index.jsp

there should be an ILE useful information thread - kinda like the LOL thread - where we xp useful info from other threads.

Thread of Being a Grown-Up

You should learn this shit in HomeEc. Even more so because you have NO advocate but yourself, and everyone ever will screw you over if at all possible.

Come to think of it, does a rental agreement show up on MY debt-to-income ratio as long as it's paid on time and in full?

if your looking to get a line of credit, credit card or other kind of bank loan then yes your rent will count towards your debt-to-income ratio. afaik it would not count for your guarantor

the first time i signed a lease my mom and stepdad were guarantors and it basically seemed to have no affect on them, their credit, w/e. i also always paid on time tho

sometimes i pay my cable bill really really late because i like when they send me a letter in a bright yellow envelope. is that bad?

i always pay my cell phone bill late because since i moved they refuse to send me a paper copy of my bill and if u wait long enough theyll text u copy. i dont think this has done anything to my credit so i keep doing it because i find the text bills v. convienent

Late payments only impact your credit report if the entity you owe $$ to reports it - the credit bureaus aren't keeping an eye on that kind of thing themselves. So what matters is the policy of your creditor. From what I've seen, utilities don't report the occasional late payment, but credit card companies do, and almost immediately. Also, the 3 credit bureaus don't seem to trade info back and forth, so things that get reported to one don't necessarily go to the others - so your score can vary depending on which bureau provides the report. Having multiple "hard" credit report requests in a short period of time is a red flag for lenders - it can mean you are applying for a bunch of credit cards in order to run them up right before declaring bankruptcy or something. But even one does knock your score with that bureau down a notch - I had to have a very thorough background check done in January which included a credit check. I am set up with a monitoring agency for a few reasons, and immediately got a pile of "negative impact" reports and saw a drop between 15 and 25 points with all 3 agencies.

I just did my 3xfree credit reports from AnnualCreditReport.com, and the last blemishes were in 2002, a couple of late payments for CC and student loan. I wonder when this stuff falls offa yr record.

I have made a LOOOOT of late payments to everyone from home mortgage to CCs since 2000, just FYI.

negative info sticks around 7 years i think? but you can also write to your creditor and ask them to take it off

http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre03.shtm

I never pay bills on time. If you let a few months stack up, you save on stamps.

I've read lately that a small flurry of the same kind of request won't negatively affect your score -- I guess so you can comparison shop for loans or etc? Because every competing provider is going to check yr credit independently? But I believe Jaq more than something I read on the internet.

However, the Fair Credit Reporting Act DOES say that if one of the things that is bringing your score down is a flurry of inquiries, they're required to SAY that so that anyone looking at you knows that your score was higher before you applied for the loans or whatever.

Of course, I'm not sure the really cut-throat inquirers like NYC mgmt companies really care. I'm beginning to think they just look quickly at one number and X you out.

Laurel, I'm really surprised they are being so tough on you. The only time I needed a guarantor was when I was a grad student and had the bright idea of renting a studio on the Lower East Side. My mom did it for me, though there was some flak about her being out-of-state, so she had to meet much more awesome guarantor requirements than usual. I don't think there are any penalties for being a guarantor, except that in the event that rent is not paid, they are ultimately responsible. So, there is a large amount of trust involved, and usually genes.

When I was looking at studios recently in Queens, I asked if I would need a guarantor again, and they looked at my fairly meager salary and said, no you are fine. They seemed to think it was Manhattan that was strict, though maybe Brooklyn is the same way? The apartment I rented in Brooklyn was through a family owner and they didn't even check my credit. Does your roommate have a steady job? When I "bought" a car the dude who sold it to me said that I was doing the best thing ever for my credit--to be making monthly payments on it. I wonder if my credit sucks now that I sold it?

Personally, I would only ask family to be a guarantor, and I would even feel weird about asking my sister. You are still very young so you could build up a little credit history that might help you later. Speaking of which, I haven't used my credit card in a couple of years, I've just been using my debit card. Is this bad for my credit? Good luck, and remember, there is always Queens:) Or try for family-owned places. Or maybe ditch the roommate and strike out on your own?

I've never been asked for more than a recent pay stub to prove I could afford the rent. Maybe recommendations from former landlords, which is fine, because I'm quiet, neat, and pay rent on time (although the last couple of months have been touch and go).

If you let a few months stack up, you save on stamps.

Aw, jeez, Beth. I hope you were kidding about this. Y ou don't really mean you'd stiff your creditors for a measly $0.42? That would be... I'd rather not say it out loud. I like you.

By repeatedly harassing our latest broker, I got him to send us copies of the style of credit/debt report that landlords are able to pull. And it is SUPER WEIRD. There's a FRAUD ALERT on my name because of a "current address mismatch - address does not match file". I MEAN WHAT? The address they have for me is FROM 2005, and I don't even know where they got it!!

Nothing else on it is ANYWHERE outside of normal, for a person who's never had a credit card. This is ridiculous.

xpost Yes, I believe she is kidding. Maybe not about the bills being late, though. Hey, happens to the best of us.

sheesh, fraud alert. surely there must be a way to clear that up with a phone call and a utility statement or somesuch?

Is your roommate's report also innocuous? Maybe this false FRAUD is scaring away the managment companies.

wow, that's totally weird! is your driver's license address current? or does the dmv have a really old one on file that makes things mismatch? i know that's probably a stupid easy question but it's funny if you move a lot how easy it is to forget to update, until you lose your license 2 years later and are like 'shit i can't get it online i gotta go down in person because my address is different :('

vp is right about owners, too. when i was looking at apt's once, this dude was having us do everything through his brother-in-law, who was a broker (though dude was doing it on the side from his firm, tsk!) and they were totally strict about guarantors, documentation, etc., and would never give us a straight answer. when we gave up and found another place, i was unemployed (but had some savings) and they looked at my roomie's income and was like 'hah, no guarantor! move in tomorrow!' but i think that's because they were just an average greenpoint polish lady and her real estate agent relative of some sort.

fraud alert

That's better than a Freud alert, the kind you get when you spend all your money on therapy and neglect your other bills.

Gosh Laurel, sorry to hear you're having so many troubles! I'm a broker and the credit reports we do are the 0-1000 ones where the lower your score the better--it's called a "national risk score" and I've seen people get approved so long as their score is under 100. Is there anything on there about landlord-tenant or other court filings? It should be the last thing on the report.

Maybe take a look at this company? www.insurent.com
None of my customers have ever used them but it's an insurance company and you can pay them to be your guarantor. They only cover apartments with rent that is over $1600 (or maybe $1800) a month and it costs something like a month's rent. Also, the landlord has to accept them. They've been pretty successful so far and most of the big landlords will accept it and smaller landlords could be convinced.

My credit sucks too, fyi. Really bad :(

Also, being a guarantor in no way affects the person doing the guaranteeing unless the rent is not paid. Guarantors are a security blanket for paranoid landlords.

No, that's another weird thing. I just have no history at all. I have student loans, some of the usual mess and late payments over the years, and nothing else. No records of any tenancy (I've never been on a lease), no non-educational debt, no court anything. Are they denying me an apt because I barely exist?

maybe.

I have a non-drivers iD only, and don't bother updating the sddress when I move, only when I get a new ID.

Are they denying me an apt because I barely exist?

Probably - this was the situation for the people I co-signed for, neither had any real credit history and it was their first lease on their own. It's not that you're a bad risk, you're an unknown risk and the landlord is a paranoid pessimist.

I think the fact that you've worked at the same, prestigious company for 5 plus years should count for something. Maybe ask your broker to show you only privately owned places? Or search Craigslist for owner-only apartments?

I did that, actually, Mary! It's a good idea, and we've successfully charmed multiple landladies into offering us really good deals. But none of the privately owned apts have been nearly as nice as the ones in big buildings. Or as big. And unfortch, most of the "by owner" section of CL is still brokers, or else listing agents working for owners. It doesn't really mean much.

We may end up taking one of those landlady apts temporarily. It seems like a good building, nice people, cool landladies. Just the apt is smallish and the modern renovation is flimsy. And we'd have to move again inside of 6 months.

Thanks, everybody! We can keep discussing credit and stuff. My only remaining question is to confirm whether a guarantor commitment would detract from the guarantor's available income/equity if they're looking for a loan at the same time. If anyone can definitively answer that, that would be awesome.

A guarantor commitment does not detract from the guarantor's income/equity/credit-worthiness or anything like that. A guarantor is just agreeing to be a backup person for the landlord to sue if you don't pay your rent :) There's no database or credit reporting agency that will ever mention anything about them guaranteeing your lease.

Hope that helps. By the way, it's relatively difficult to get someone evicted in NYC and that's why landlords ask for so much documentation, etc. I spend all day explaining this stuff to worried parents offended and disgusted by the entire process of renting in NYC.

I forgot to mention that if it ever comes down to a court filing, the guarantor would likely be named in the suit. That's pretty much the only bad thing that could happen.

so this application i filled out (not in nyc)... the lady says in the preliminary credit check they don't show my current address (where i have lived for 2.5 years, and the address for my student loans and all bills). how do you fix this?

btw my FICO report shows the correct address. I will have to check my agency reports when i'm home.. curious.

I have no idea at all -- I made payments on things back in February that still haven't affected my credit score as far as I can tell. And they had an old address for me, too.

As far as I know, you have to contact the 3 agencies yourself to correct things (Experian, TransUnion, and er, something else) - they don't actively pick up info, only relay what others have reported to them.

equifax is the third, i believe.

so annoying, but she said the credit looked fine aside form the address discrepancy! this whole thing is so nerve-wracking!

the most annoying part is a medical bill that UR messed up YEARS ago by not properly processing my insurance and never fixing, that is still showing up as a 'collection'. a;lskdgj.