Dear Credit Guy,

I am a single retired woman. My only income is Social Security, a small pension and an IRA from my former employer. I co-signed a personal loan for a friend about four years ago. She recently stopped making the payments and my credit report shows a drop in my credit score. I know in California my Social Security and retirement account are protected. My question is how will this affect my ability to acquire a place to rent? Is there a different reporting agency for rental history? I can't afford to make the payments. 

- Annette

Dear Annette,

Before I answer your concerns about renting with a blemish on your credit report, I want to quickly address your co-signing issue. For you and my other readers, please do not even consider co-signing a loan if you cannot afford to make the payments on the loan yourself. More often than not, the fact that a lender has decided the person is not a good risk for a loan (which is why they need a co-signer) ends up being true.

To add insult to injury for many co-signers, the lender does not contact you, the co-signer, until the account is seriously past due and that fact has already been reported on your credit report. If that was not enough punishment for a good deed, many relationships are ruined or severely strained after a co-signing. My recommendation is to avoid co-signing, period.

Now for some good news. Yes, numerous specialty reporting agencies exist, many of which report on tenant history. If you have a good rental history with no evictions or unpaid balances, you should not have any trouble renting a place to live. A potential landlord may check your credit report with one of the three major credit bureaus -- Equifax, Experian and TransUnion -- as well as your rental history, but if the co-signed account is the only negative on your credit report, it should not keep you from obtaining a lease. You might even consider letting the landlord know upfront that you made a mistake and co-signed for a loan that is damaging your credit report. Honesty is always the best policy.

If you are not sure about your tenant history or would just like to see what your history looks like, you are entitled to a free copy of your tenant history report each year. It is not as well known by consumers that the [%Link?type=glossary&id=402&text="Fair and Accurate Credit Transactions Act of 2003"%] also provides that specialty reporting agencies must provide a free report annually just like the major credit bureaus. The major difference is that the specialty bureaus are required only to have a toll-free number to request reports and are not required to have online access for requests.

Because there are so many tenant history companies, if you want to review the same report as your potential landlord, I would recommend asking the landlord which tenant history company he uses and the best way to contact them. To check your tenant history report from any of the agencies, you can do so online with ChoicePoint and click on resident history report or at First Advantage Safe Rent. You will still have to place a toll-free call and mail or fax in a request form, but the links above will give you additional information.

Should you be denied a lease by a landlord based on information in a consumer report, you are entitled to a free copy of the credit report that the landlord viewed to make that decision. In addition, these specialty reports may contain errors just as your credit report can, so be sure you review the tenant history report for accuracy and dispute any inaccurate information with the company that reported it.

Take care of your credit!

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