How a foreclosure can impact your credit?

You know that a foreclosure on your home can be a big deal when it comes to your credit. But how big of a deal can it be? You might be surprised at how much a foreclosure can impact your credit, and how long it can take to recover, depending on the situation.

Why foreclosure can be so devastating

Foreclosure can be so devastating because it is related to your payment history. Your payment history is the largest factor affecting your credit score. Before your home goes into foreclosure, there is a good chance that you have missed at least three payments. By the time the foreclosure process is complete, you might have missed even more payments. All of these missed payments are recorded in your credit history and affect your credit score.
The more payments you miss, and the more “important” those accounts are, the bigger the impact on your score. If your score is 680 and you go through a foreclosure, you could see a drop of 85 to 105 points in your score. A higher score, of 780, could result in a drop of between 140 and 160 points.
Combining foreclosure with another problem, such as a short sale or a bankruptcy on your record, can be even more devastating and result in more difficulty as you attempt to recover your score.
                                  

Short sales and your credit

Ms. X, the financial writer behind A Matter of Life or Debt, and her husband  found out the hard way that a near-foreclosure resulting in a short sale can be just as debilitating to a credit situation. They bought a home in 2007, just before the bottom fell out from the market. Even though the couple filed for bankruptcy in 2008, Ms. X says the short sale process hurt them more.
They kept the house through the bankruptcy and started working to recover their financial situation. However, the market crash of 2008 meant that home values plummeted. Suddenly (and especially after putting in thousands for renovations), Ms. X and her husband were stuck in a home that wasn’t worth what they were paying for it.
“After finding out we were expecting our third child, we realized that we’d never bounce back if we stayed in an underwater home,” Ms. X says. “We started the short sale or foreclosure process.”

Source: Secondary

Secret To Financially Stable Married Life

Being married involves having a shared vision about the future. Spouses should always plan their individual, as well as joint finances. If not appropriately planned, this could take a toll on the couple's financial health. 

Married couples generally maintain two separate credit records and histories. Thus, both husband and wife should obtain their individual credit information reports (CIR) from a recognized credit information company and check their respective reports. Most married couples in India move from an individualistic credit outlook to a joint one post marriage. In such situations, it would be prudent to analyse both the individual CIRs and take a consolidated action on what is needed to make their financial situation better. 

Maintaining a good credit score is easier said than done. A few simple steps can go a long way in keeping a check on your credit history. 
              

Always pay as agreed 

All repayments - and missed ones - are recorded on your CIR. Missed payments and high outstanding amounts negatively impact your credit history and credit score. Pay your EMIs and credit card dues on time and as agreed to the lender. 

Joint and guarantor credit a/cs 

Monitor your joint loans or loans where you are the guarantor regularly , since you are held equally liable for missed payments. Joint holder's negligence could affect your ability to access credit/loan when you need it. Also evaluate the possibility of moving an individual loan to a joint mode. In this way, both of them can avail additional tax benefits which in turn will result in family savings. Such opportunities also provide each partner to monitor the financial situation of the family and total outstanding. 

Credit/loan applications 

Inquiries made by lenders because of an application you made for credit or loan can affect your score. Too many inquiries might mean that you're taking on too much loan or that you're in some kind of financial trouble and are looking for credit to help you out. In most of the cases, it will be prudent to apply for the loan as joint holders rather than individual persons. 

How to improve your score? 

Recency of the occurrence of the default is considered by the lenders. As a result, though defaults may have some impact on your overall credit rating, it should not prevent you from availing of a new loan if your payment behavior subsequently has been regular across the loans and credit cards you hold. However, in case of couples, one of them having a better than expected score can compensate to having slightly poor score of the other. Such scores will be viewed complementary in case of joint liability when couples apply for a loan. 

The credit score is impacted by a combination of both negative and positive events. Many banks allow customers to rebuild their credit record with a secured credit product and the credit card with a deposit securing it is an example. This is definitely a good means of rebuilding a good track record. 

Source: Secondary

Your loan future is decided by your credit history.

What is your credit history? A question often posed to most borrowers may as well be the driving focus over the next couple of years in determining the future course of the borrowing market. The current scenario in which borrowers seek loans on the same rate regardless of their payment record and financial history is unfair for those who are diligent with their payments. In fact, it will be increasingly more and more difficult for consumers to borrow unless they have a sound credit history across a range of products.

 

Capturing of relevant and timely information by credit bureaus and its effective sharing with financial institutions will have important ramifications in driving the efficacy of the whole lending industry. Last year, the RBI made concrete moves in widening the field for credit bureaus by issuing licenses to three new credit bureaus.

 

From then on, these credit bureaus have been steadily building their presence in India amid the burgeoning number of Indians who use financial products. The presence of multiple bureaus augurs well in improving lending decision making. It makes for the availability of a wide range of data, and value-added products that help interpret the value of that data, thereby improving decision making quality.

 

Most credit rating bureaus operate as joint ventures between banks. In many ways, this is a mutually beneficial relationship—facilitating data sharing between banks and bureaus, and the subsequent access to reports. We are also seeing many banks following the test-compare-adopt model with credit bureaus. Thus in a competitive market the multi-bureau system is well appreciated.

 

Active portfolio management of accounts will be the next important step that lenders will undertake. Typically, banks do not actively track customer activities after the sanctioning of loans, unless the customer defaults or delays a payment. Customer profiles are fast changing with a new penchant for multiple credit cards and loans.

 

A once-diligent customer is likely to go overboard and over-leverage after taking the first loan, and may even turn delinquent. Active portfolio management will help track customers constant efforts at leveraging themselves. Credit bureaus will play a key role in the implementation of active portfolio management. Thanks to modeling and monitoring tools like these, lenders can actively manage their loan portfolios to ensure an efficient risk/reward ratio and sufficient diversification of loans—much as they would in an investment portfolio.

 

The scope of offerings by credit bureaus in the Indian market is likely to get more sophisticated.

 

Personal credit reports will play a key role in empowering borrowers to begin negotiating interest rates based on their credit history. This assumes special significance in an environment marked by both high interest rates and spiraling cost of living. The time is not far off when consumers with good credit history will be in the driver's seat while going to their banks of choice and negotiating better rates for themselves. A multi bureau set up implies this will be done sooner than later, making it a win-win for both consumers and lenders.

Source: Secondary

For youngsters: A guide to build Credit score

While learning the basics of money management should begin in high school (or earlier,possible), the four to six years AFTER they graduate from high school is the most important time financially.  This is the time young adults become savers or spenders.High schoolers have many opportunities to begin learning how to manage money.  They likely will have part-time jobs, and, therefore, the money to begin to spend and save.  Many teens also have vehicles and need to pay for gas and insurance.If they begin saving now, they’ll have the advantage over their peers in a few years when they have the cash to put a down payment on a house.  If they invest in a retirement fund, thanks to compound interest, they’ll likely be in a much better position than their peers 40 or 50 years down the road.

Besides learning to save, learning to manage credit is equally important.  If a young person isn’t responsible with credit, he’ll set up the cycle of being in debt and having less income to use for other goals and expenses.
Often, getting credit is difficult in the beginning, but it doesn’t have to be.  Here are some ways a recent high school student can begin to build credit:

1.  Piggyback on someone else’s credit.  If you’re financially responsible, your parents may consider adding you as a user on their credit card.  There are several caveats here.

Consider your parents’ credit record.  Make sure that your parents have good (or great) credit as their credit score can be passed on to you within a matter of months of being an authorized user.  This is great news if their credit score is 780, but horrible news if their credit score is 580.
No credit is better than assuming low credit.

Consider how old the credit card is.  You’ll also want to strategically choose which credit card to be added to.  The best choice is a credit card that has been opened for several years and has a low balance.  You’ll want to make sure that your parents have always paid it on time.
Make sure the credit card company reports to credit bureaus.  Lastly, make sure that the credit card you’ve chosen reports authorized users to the credit bureaus.  If it doesn’t, being an authorized user won’t help you at all because the three credit bureaus won’t know you’re authorized on the card and you still won’t have a credit score.

Be responsible.  If you’re added as an authorized user, you should respect your parents’ trust in you.  Be responsible with the privilege they’ve given you.  If you overcharge, they’ll have to pay.

2.  Open a secured credit card.  Another option is to open a secured credit card.  (Make sure to ask the company if they regularly report customers to the credit bureaus.)   With this type of credit card, you pay a small deposit, so the credit card company has collateral if you don’t make timely payments.  Your credit limit is usually about the amount of your deposit.

Once the card is opened, be sure to make a few purchases a month and to ALWAYS pay on time.  Try to keep the balance low.

After six to twelve months of paying regularly, the credit card company may turn your account into a regular credit account.  If they don’t, check your credit score.  You may have a good enough credit score at this time to open a credit card account with a different company.
Once you become an authorized user or open a secured credit card, you simply need to pay the bill on time and control your spending.  Within six months to a year, you should be able to open a regular credit card account and begin your credit history.

Source: Secondary

Go for loan if you really need one !

A number of these requests within a very short span of time can have a negative impact on the credit score.Let us understand it with an example :

Rahul who is a top official at a large brokerage firm was incensed with his prospective home loan lender. He had approached them on the advice of his colleague to whom the lender had given an excellent rate. While the lender was more than happy to give him the loan, they were offering him a slightly higher rate.  When he enquired about the reason, he was informally told that his credit score was lower than his colleague and hence the higher rate.

He asked for and got a copy of his credit report from the prospective lender and confirmed that the credit report was in order and had correctly showed that he had paid all his dues on time. He had also requested his colleague to get the credit report from the same lender.

When Rahul compared the two reports he was amazed that his credit score was lower than his colleague’s score.  Hence, he called me to throw some light on the matter.

I asked him to take his colleague’s permission and send the two credit reports to me. The look at two reports was quite illuminating.

Both had excellent repayment records and good credit scores though his colleague’s score was little higher than Rahul’s. The only visible difference was that Rahul had about four credit cards (all showed an impeccable repayment record on the credit report) against only two credit cards for his colleague. However, a closer look revealed that there had been four enquiries for his credit report for a personal loan of `300,000 just four months back, though no personal loan showed up on his report.

When I checked with Rahul, I was told that he was considering taking a personal loan for a foreign holiday but had ultimately dropped the idea. He had applied to four banks but ultimately did not take the personal loan though it was sanctioned. The banks, once they received the request from him for a personal loan, had sent a request to Cibil for his credit report.

The credit report also contains information about how many times Cibil got a request for the credit score of a particular person and for what products and amounts.

Now it is not known how Cibil exactly determines your credit score but a number of these requests within a very short span of time, especially for unsecured credit (indicating hunger for credit), can have a negative impact on the credit score.

So, at least for now I asked Rahul to live with it (after all his credit score was not bad). But for the future I told him to be careful while shopping for credit. First make up your mind if you need credit or not before applying for it. Sometimes the sheer fact that you applied for credit (that you did not ultimately need) may result in a small reduction in your credit score even though you did not end up taking the loan.

These kinds of errors are to be reported immediately to Cibil and the concerned banks. The banks should be asked to get the records amended in Cibil records. If they do not respond to your request within a month, you should file a complaint with the banking ombudsman. A mistake in your credit record can prove very expensive, hence pursue these steps seriously.

You should apply for a loan or credit card only and only if you see no error in your Cibil report.

Once you get your credit report and it is error-free, you should go ahead shopping for credit card or a loan product.

But before applying for many of them to know more about the scheme aligned with them, you should always do some smart shopping online.

You can compare various credit products and then apply only for the product that suits your requirement the best. This will ensure that only one bank makes an inquiry for you credit record, hence your high credit score can be safeguarded.

Get personalized services related to credit report and generation of score by just booking an appointment at www.cibilconsultants.com

Source-secondary

ATM Thefts

It's any time money not just for depositors but also for thieves.

If India puts not just a man on the moon but also the first ATM, the next day's headlines could announce that the money withdrawn by the country's first lunar bank customer was swiped seconds later by an anonymous compatriot who had managed to get there on his own steam.

ATM thefts are one area where India is not lagging behind the developed world. It's not just in Japan that there are reports of the yakuza (gangsters) using trucks with sophisticated construction equipment to uproot ATMs. India's Silicon Valley of Bangalore has also witnessed amateurish attempts to carry away ATMs, lock, stock and barrel.

And so what if, according to some media reports, India holds the record for the world's highest installed ATM some 4,000 metres above sea level and around the Nathu La Pass in Sikkim. There are also reports that the Agricultural Bank of China has installed the world's highest ATM at around 4,500 m in Tibet. There are no reports however of the highest ATM theft. Whether the record is jointly held by Chindia is not known.

ATMs are hitting the headlines for all the wrong reasons. It is not just the customer who no longer has to go to the bank to withdraw money but can swipe a smart card (with an embedded chip containing a unique number) at an ATM. Likewise, instead of holding up a bank like the gangster John Dillinger used to do in the days of the Great Depression in America, the 21st-century thief can source his daily requirements by swiping someone else's money at the nearest friendly neighborhood ATM which is open 24x7.

The ATM has not just enabled the individual customer to have transactions with his own account without accessing the bank's entire database. It has also decentralized bank thefts since the individual thief can operate at a micro level and swipe someone else's hard-earned money by circumventing the customer-identity integrity systems by attaching fake keypads or card-readers on ATMs, to record confidential data like the depositor's PIN. Technological devices have been developed to detect foreign objects on ATMs.

Learn about identity theft at www.cibilconsultants.com

Source: Secondary

Don’t let history repeat itself

I have often come across friends boasting, “My credit score is higher than yours,” and those on the “lower” end of the comparison want to have higher scores. Then there are past defaulters who wish to be considered for a loan and complain that banks turn down their application even after they have settled all outstanding in full and even improved their scores. In many cases they are indignant that they have now settled all the over dues, hence should get access to loans.

Past defaulters

Let us take up the case of the past defaulter first. Let us suppose you are in the money lending business and a potential borrower has approached you for a loan. Would you lend to this individual knowing fully well that he has delayed payment in the past to another money lender and only settled a part of the amount of overdue interest to the lender? Even if he had settled his outstanding in full along with overdue interest, would you still lend to him?

Like any sensible businessman you will wait for a while till he shows better record with someone else before you lend him money. This is exactly how one who is placed in this category of borrower should do: First, settle all outstanding payments. Even you settle, do not expect an overnight increase in your ability to borrow more. You will need to slowly rebuild your history. The best way is to get loans that are available despite your adverse credit history.

You can take a secured credit card from some public sector banks where you place a fixed deposit with the concerned bank and they give you a credit card with some percentage limit of the fixed deposit amount. This ensures that the bank is completely protected from the risk of any default as they can set off the credit card outstanding against the fixed deposit amount in case of the eventuality.

The reason it helps the consumer is that when he spends and pays back on the credit card, he is building a good repayment history. The other option could be to take a loan against gold from leading banks or NBFCs. Again the lender is fully protected and hence is able to give a loan despite the adverse credit history.

Prompt repayment on such loans again creates better credit history. Over time the credit institution starts giving less weightage to your old default and more weightage to your current prompt payment and hence the overall credit score starts improving.

Keeping up with the Joneses

The second category of people compare their score with their friends discover that their credit score is lower than their friends/relatives and want to understand the reasons. Do not get obsessed about your credit score as long as it is above 750. Unlike the US where a movement of 5-10 points in your credit score could cost/save you thousands of dollars in interest and fees, in India lenders just use your credit score to eliminate people whom they will not consider for lending. So if you have a credit score of 825 and your friend has 775, you will still get the same rate and experience from the lender since both of you will make the grade to be considered for the loan. Here are a few things that you could do to make sure that your score becomes higher while waiting for the benefits to accrue:

Get a copy of your own credit report at least once a year and make sure you follow up to get any errors corrected to ensure it does not hurt your credit score.

Pay your bills on time

Keep unsecured loans to a minimum. Don’t close your old credit cards as repayment history on older credits has a higher weightage than on a newer facility. If you have used the credit limit on your card almost fully then apply to get your credit limits enhanced to show lower utilization of your credit limits.

Book an appointment to get credit report and rectify the errors at www.cibilconsultants.com

Source: Secondary

Real-time Credit Scoring Fuels Personal Loan

Unsecured personal loans which had all but disappeared after record defaults in 2007-08 are making a strong comeback thanks to the Credit Information Bureau of India's real-time credit scoring. Also expanding the market are new intermediaries who are generating leads that help lenders go beyond tapping walk-in customers at retail chains.

Consumer loans on equated monthly installments started picking up a couple of years back initially through credit cards. The EMI sales was also driven by subvention from the dealer or manufacturer who agreed to bear the interest cost but not the credit risk. Card companies were the first to tap this opportunity. But considering that there are only 1.9 crore credit cards in circulation the market is quite limited. Lenders such as Bajaj Finance, Future Capital, and Fullerton have expanded the market by putting up their loan desks within retail chains.

"In 2007 all finance companies did not have a clue of who the borrower. The loans were on the basis of documents filed by the borrower. We found that even Form 16 documents were fake" said the chief of finance company. He added that loans were pushed by agents who had an incentive to get disbursements which created a moral hazard resulting in bad loans rising. What has changed now is that lender is now able to identify how leveraged the applicant is, they can also identify in five minutes if the borrower had missed out on any loan installment in the past.

Besides finance companies banks too are scaling up their consumer loan business. According to the latest RBI data, outstanding consumer loans on April 28, 2014 stood at Rs 13700 crore up 60% from Rs 8600 crore a year ago. These consumer loans are typically those availed for making small-ticket purchases such as washing machines, flat screen televisions or laptops. Among finance companies, Future Capital's consumer loan book has almost doubled from Rs 1821 crore in March 13 to Rs 3593 crore in March 14. Bajaj Finserv has seen its Consumer loans disbursements rise 36% to Rs 13,360 crore in FY14.

Lenders are able to take a decision within minutes because they are able to pull down an individual's credit history within five to seven minutes and find out the extent of loans and the level of delinquency. "We now have credit history information in respect of 330 million accounts in our repository which includes information from 350 cooperative banks and over 300 regional rural banks," said Harshala Chandorkar, senior VP, Cibil. "Besides drawing the credit scores from Cibil, the lenders have systems where their credit policy is built into the software. This allows them to disburse loans instantly," she added.

Expanding the market to tier II centres are a new set of intermediaries. Onemi India which initially started as a catalogue mail order firm which retailed consumer goods at EMIs by tying up with card companies. With a customer base of 2.5 lakh Onemi has now raised $5mn in private equity funding from Venture East. It is now targeting loans of Rs 385 crore during FY15.

"For the lenders the last mile is always the problem. What we do is conduct the due diligence on behalf of the lenders at the applicants location. Besides earning from generating leads for lenders we are also looking at whether we can underwrite some of the credit risk," said Abhijit Bhandari, director and founder of Onemi. The company is now looking at raising more capital which will be invest in warehouses and logistics.

"We are also looking at selling to customers of micro finance companies. Since MFIs can lend only in income generating segments we are looking at retailing goods such as inverters and bicycles. Our research has shown that there is also a great demand for laptops even in rural areas," said Bhandari. While banks continue to find it a challenge to lend to the new-to-credit segment, finance companies and intermediaries like Onemi see this as a big opportunity.

Besides getting information on borrowers, Cibil is now trying to enrich its database by including repayment profile of those who have never availed of a loan. The credit scoring agency has sought permission from Reserve Bank of India to obtain payment track record in respect of utilities such as telephone bills and also in payment of insurance premium. "The telecom companies have expressed their willingness to share subscriber credit records. They are already using Cibil credit records for fixing credit limits for post-paid subscribers," she said.

Improve and maintain your credit score at www.cibilconsultants.com

Source: Secondary

Myths about CIBIL score

There are various articles on the internet about the importance of maintaining a good CIBIL score to speed up your chances of getting a loan approval. But, more often than not this information may get confusing for the public. As a result, many of these people may go on about their works as usual, unaware that this indifference might cause a negative impact on their credit scores.

Nowadays it is extremely important to have a good CIBIL score. RBI has made it compulsory for all lenders to take into consideration the CIBIL report before making their credit approval decisions.

As we mentioned above,there is a lot of wrong information on the internet about maintaining the perfect score therefore we attempt to bust some common myths about the credit score below.

Higher income is the reason for higher Credit score:

CIBIL credit score gets affected by your credit behaviour, not your income. Irresponsible credit behaviour can be shown by high income groups which could lead to low credit scores.It is the length of credit history which helps in strengthening your credit score.

Checking your CIBIL score will have a negative impact on it:

It is said that enquiring about your CIBIL report or CIBIL score may get you a negative marking so many people avoid checking the score.This is quite opposite to what the truth is. infect checking your CIBIL report at least once a year is good financial practice.
Checking your own CIBIL score is considered as ‘soft enquiry’ and won’t have an impact on your score but if credit card issuers or lenders ask CIBIL to give access to your CIBIL report, it will be considered as ‘hard enquiry’ as it will get recorded in the enquiry section of your report.
Loan applications given to many banks at a point of time may lead to enquiries in quick succession which will be tagged as ‘credit hungry behavior’ which will have a negative impact on your score. However checking out your CIBIL report once a year, is like getting a health check.It won’t hurt you score at all.

No credit equals to a good CIBIL score:

Many Indians have grown up with the belief that it is a bad thing to live on credit. There are many of such people who avoid loans and credit cards like the plague and assume their credit score would be perfect because they are not using credit. These people are more in the line of fire than those who hurt their score by over-leveraging themselves.
The people who don’t borrow don’t have a credit history and thus, they cannot be assigned a credit score by any of the credit bureaus. These people would then find it hard to get a loan. Therefore ,it is better to use credit responsibly than have no credit history at all.
Having a credit or taking loans is a good thing as long as you keep making timely repayments.This helps you in maintaining a good CIBIL score and is considered as good financial behaviour.

Conclusion

Responsible use of credit and low credit utilization rate have a good effect on your CIBIL score. If you are doing this then you don’t have to worry when you are in need for credit.
For more details visit www.cibilconsultants.com

Source: Secondary

Make your business creditworthy !

Is your business credit worthy is one of the main things asked when you apply for a loan or credit card. Here are some ways to make your business credit worthy-

Make yourself personally creditworthy:
Your personal credit score pays a big role in building your business creditworthiness. If it is low, you should focus on repairing it. Pay off all your dues on time i.e. any past amounts which are due and/or also those in process of collection. Pay down any revolving balances on your credit cards and in future try to avoid carrying such debts. If that is not possible for you, then make sure you pay more than the minimum amount which is due and also make these payments on time.

Establish a separate business identity:
As and when your business starts getting settled and well established and you are looking for specific credit score for your business, then set up a separate business entity from your personal affairs. Get advice from your legal advisor or attorney on which would be the best possible legal structure for your business. Register for a federal tax ID or an EIN (employee identification no) in your state. Then lastly, establish a business banking relationship to segregate your business from your personal finances.

Establish separate credit record for business:
After you've set up a separate business identity for your business and been there for a while, you would like a separate credit record different from your personal credit record, for your business too and for this you need to apply for a separate credit card for your business.

Keep up with your business credit reports:
Most businessmen say they don’t get time to check their business credit reports when in reality they are just afraid to check them. You should not be afraid because the faster you would check the reports, the sooner you’ll be able repair them or fix any discrepancies you find. The credit reports should be checked at least annually to make sure there are no mistakes; if you have a frequently changing business situation then check them quarterly. Get your most recent credit report when applying for a loan.

Keep checking up with the credit rating:
Keep checking up with the credit rating about your reports. If you find any inaccuracies or error in your business credit reports, report to the credit bureau directly and challenge them.These bureau are supposed to contact the lenders with the incorrect information; the creditor would then, either contact the credit bureau and correct the information or would respond to you, explaining their reasons on why they do not agree with you on issue of the disputed payment.

When you settle this issue, your credit score is most likely to go up. However, keep checking it till it does.
Now that your credit score has improved it would also improve your credit worthiness. This credit line can be a safety net for your business, as it makes sure that you have required cash for your day to day business activities and for handling an emergency.

For any assistance regarding credit scores and report book an appointment now only at www.cibilconsultants.com

Source: Secondary

Can you get house on rent if you have bad credit score ?

Nowadays, many people face the problem of bad credit. And with bad credit comes several problems from getting a job to financial transactions, to renting a home rather than buying a house. Credit score is not just looked at when you go for buying a loan but also when you go out to rent a house. But unlike when you go for buying a house, renting a house with bad credit is still manageable, if you know what you are up against.

For getting qualified to rent a house, you need to prove to the owner that your bad credit in no way would disqualify you as a bad tenant. So make sure that you prepare your credit before applying for renting a house.

Be prepared beforehand:
Try to clear up your credit as much as you can. Try to give the lender as much documentation you can to show you are now trying to improve your credit score. Try to establish a record of regular bill payments.

In the market for a long time:
Try to search for a house which has been in the market for a long time. These properties are usually in low demand for them being not in good localities or they are in need of renovation. Such low demand properties have less strict terms for renting and you can lend them easily.

Be honest about your bad credit status:
Naturally, we think that our bad credit won’t let us get accepted for the tenancy but there is no point in hiding your financial past for this, it would only backfire. If, later, the owner finds out about your bad credit, he may look at you like you are a risk since you are hiding stuff. Be honest to the owner that you have a bad credit but try to make him believe that you are now changing and striving to improve your credit score.

Large Deposit:
Always save beforehand for a large deposit. Since you have a bad credit, the lender might see you as a lender’s risk and ask for a hefty deposit. If not, you can use the same amount to make him take the decision in your favour. You can also use this deposit as a few months advance rent.

Research & Reference:
Search for an owner who doesn't run a credit score check. You’ll usually find such landlords in local classifieds as they are private and not big management companies. Get references from your previous landowners who could write good feedback about you and then you credit score won’t matter much. If the present owner sees good feedback about the duration of you stay, your payment record, then it would add value to your rent application despite the bad credit.

Source: Secondary