Can I do rent to rent if I have bad credit?

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Hello, hello, hello and welcome aboard episode 41 of the Rent to Rent Success Podcast.

Today we’re talking about bad credit. 

And whether you can do rent to rent if your credit is bad.

If you’re just joining us, do go back to episode 1 as the episodes build on each other to give you the full view of rent to rent success. 

Before I start today I want to invite you to get closer.
There’s lots more Rent 2 Rent Success in the Facebook group.

Like-minded people and a chance to get to know us better and meet some of our podcast guests.

Rent 2 rent success secrets on Facebook here.

See you there!

You might be thinking about rent to rent and decide it’s all very well in theory but you don’t think rent to rent is for you because you have bad credit. 

This is important because a low credit score will make it challenging to pass the referencing process with letting agents.

My answer surprises some people.
And it angers others.

The true answer is...
Yes, you can do rent to rent if you have bad credit.

Some of the most successful business people and entrepreneurs started off with nothing or even significantly in debt.
Many of them have gone bankrupt in the past or managed their money badly.

There are some provisos though, if you have gone through our four step Credit Success process, you are ready to get started in rent to rent right now.

And if you haven’t, do these steps first and then get started afterwards.

Here’s our simple FTFP 4 step credit success system

Step 1 – Forgive Yourself 

If you have bad credit, it’s likely you’ve been through a challenging financial situation in the past.
And the resulting low score on your credit file is due to choices you made in the past which have not turned out in the way you hoped.
Or perhaps someone else has taken actions that has resulted in your credit score being lowered.
In this case forgive yourself for trusting them.

This is so important because when you hold on to resenting yourself, punishing yourself, seeing yourself as a victim and not trusting, it’s hard to move forward positively.
And feeling badly about yourself in this situation is normal too so don’t blame yourself for feeling badly either.

I find it useful to believe that ‘everything happened exactly as it was supposed to’.
You were supposed to go through the challenging times that you did. You were supposed to overcome the obstacles that you have.
You were supposed to grow stronger.
You were supposed to grow wiser.
You were supposed to move forward from exactly where you are.
So forgive yourself and others for any past mistakes and plan how to move forward successfully.
I want you to believe that you will succeed in property. 

What you say to yourself drives your actions more than anything else. So, I want you to be telling yourself, even when it doesn't feel like, even on the days where you feel under par, I want you to tell yourself, 

I can do this.
I will do this.
Other people have got out of situations worse than mine and I will. 

Step 2  – Think of Yourself as a Creator of Wealth 

Now I know you may feel the term wealth creator sounds sleazy.
What I’m talking about is beginning to think of someone who creates wealth.
And we’re starting off with income.
Beyond your job how could you create income?

This was a huge mind shift for me.
It’s part of the reason why I’ve been able to build a business and buy assets worth millions within four years, after decades of financial mediocrity.
It’s as though a light bulb went on and my thinking and then my actions began to shift. 

Begin thinking ‘I can start creating wealth in my life’.
I don't just have to wait for a job.
I don't have to wait to get a raise.
I can be the wealth creator.
There's such liberation in that.
Offer yourself the idea that you can be a wealth creator, not only a wealth consumer.
Your actions start with your thinking.

There is a way for you to create more value and more income in your life. 

Step 3  – Fix the bucket & your credit 

Money flows.
And in the UK, even if we are earning an average salary, it’s a lot of money. With an average salary of £25k per year, in the last 10 years you’ll have had £250k come through your hands.
And many of us are not very intentional about the way we look after the money that comes to us.
When we’re intentional about it, we can grow it and become wealthy even on what is considered a low salary.
You can learn more about this concept in Thomas Stanley and William Danko book The Millionaire Next Door.

Typically, getting into debt requires more money going out than coming in.
And we need to ensure that your income bucket doesn’t have holes in it.

It means working out how you can live within your income.
Now, sometimes this might mean doing something radical to reorganise your life so you can live within your income.

Offer yourself freedom and ask, if I could change everything, what could I change in my life that would allow me to live within my income?
And make the changes.
You will then want to look for easy wins to increase your income too, such as selling things you no longer need.

Once you can live within your means you can focus on fixing your credit. Now the good thing here is that bad credit is not forever, it’s for six years. 

There are three main credit reference agencies, Experian, Equifax and TransUnion (used to be CallCredit). Get your free credit reports from each of them and look at what you need to do to improve your score. If you've got a County Court Judgement, make sure it's satisfied.

Step 4 - Pay yourself first

Once you've got your foundations in place - you forgive yourself, you think of yourself as a wealth creator, you fix the bucket and begin to fix your credit.
Once there, the final part of the puzzle is to pay yourself first.

You need to have money to invest in your business and to do that you need to save some of the money that flows to you, keep it, and make it grow.
That’s what investing is whether it’s in a business or in a property.
So, when you get to a point where you can save and have some savings, you’re ready to get started in rent to rent.
And rent to rent is a great way for you to pay off debts faster, if you still have them.

When you start this process, your credit will improve over months, it won’t improve overnight.
So when you do start in rent to rent, I encourage you to work directly with landlords.
Most landlords will not ask you for a credit report. You just need to make sure that your income and savings are such that you can afford to take on rent to rent.
You need to have a good foundation of some money so that you can meet your obligations under the rent to rent agreement.

It's a fantastic way to start in business, to become a wealth creator and to really make changes in your life. 

If you’d like to find out more about rent to rent and see if it’s right for you sign up for our Free Rent 2 Rent Success Guide and Masterclass here.

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Until next time, have a great rest of the week.
And remember,

Believe Bigger, Be Bolder and Be a Gamechanger!

See you soon!
Stephanie & Nicky
xx

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