Chances are you already know how important credit can be when purchasing a new home. Is it really true though, that a rent-to-own program can actually help repair your credit?

While nothing is true all the time, owning a rent-to-own home usually will improve your credit. Here are a few ways:

• The owner will help you with a letter of on-time payments.
• Lower monthly payments will help you catch up on other bills.
• Time is on your side.
• Qualifying for a loan is usually easier because of accumulated equity.
• When you get a loan on rent-to-own home, your credit jumps.

Armed with a letter of on-time payments from the rent-to-own homeowner, it will be easier for you to qualify for a loan. Especially, if you have paid off other bills. Paying off old debt will improve your debt to income ratio.

If nothing changes in your financial picture for better or for worse, time is still your friend. Credit repair generally is achieved, even when nothing changes. However, it is extremely important that no more late payments are reported to the credit bureaus.

Most rent–to-own homes will appreciate over time. This will reduce the lenders risk. Think of it this way, let’s say you are the lender and you have an opportunity to lend money for the purchase of a rent-to-own home. And, assume the rent-to-own buyer has a 10-20% stake invested in the property. Wouldn’t that be a better credit risk than someone attempting to get 100% financing? Absolutely!

Finally, ask any one you know that has bought a home. They will be the first to tell you that within days of closing on their home, they had credit card offers from numerous credit card companies. This should be a tell-tale sign for anyone that credit repair has taken place because of a successful rent-to-own home program.

About the Author:
David L. Trosdahl has been the CEO of 3 regional sales & marketing companies and founder of a non-profit corporation. A real estate investor since 1991, David has bought and sold numerous residential properties, and has helped many people find a house for rent. David is a member of the real estate investors association: MNREIA, is founder of the real estate investing website: RentToOwn-MN.com and many others.