We live in a world where one's credit rating speaks volumes and leads to prejudice. In this current market, many apartment owners are unwilling to take a chance on some former homeowners because of major blemishes like foreclosure or numerous past due notices. If losing the American Dream was not hard enough already and humiliating for many, it is the struggle to recover that proves to be the true challenge.

As a result many former homeowners find themselves living in hotels after foreclosure because apartment management companies will not rent to them. Staying at the hotel is no vacation at $3000 a month and leads to many living in an upside down predicament. There are possible solutions, remedies for renters in this situation. They can rent from a private owner, mom and pop or other management companies, private investors, that are more flexible with assessing credit risk. Many may not even run a credit or background check. Also money talks and if you have the Benjamins, people have the time to listen. Really it may just be an issue of a double deposit upfront or paying six months in advance on a lease. Still as more former homeowners find themselves between a rock and a hard place, many just don't have the extra funds and continue in this downward spiral. If they had the funds in the first place, wouldn't they have saved their homes?

Currently the American economy is depressed. The housing market bubble has burst causing major havoc in once up and coming areas of the country. Due to increased energy costs with a gallon of gas over four dollars and many regions facing lack of job market growth, more and more people are losing their homes to foreclosure. When they go to apply for an apartment rental, many of these managers are seeing an increase in lack of credit worthiness. These negative marks include not only foreclosures but also short sales and deed-in-lieu situations. These are measures taken by the bank or mortgage company for the homeowner to either sell the property or give it back instead of facing foreclosure all at a loss for both parties. The bank isn't making money and the homeowner is left on the streets.

Many of these former homeowners, turned renters, find themselves looking for housing in unexpected places or shadow markets where rental properties are privately owned or maintained by pools of investors. In fact about half of the rental stock is not monitored by the apartment management industry. As more and more former homeowners find themselves applying for traditional rental stock, this creates great concern for property management companies because they want to provide a service without incurring much risk.

Some landlords, especially property management companies, are hesitant to rent to people with credit issues and especially people who are experiencing the process of foreclosure or going through a short sale. They see these renters as lacking integrity. These renters may sign the lease contract but then not follow through.

Really this creates a cycle of mistrust. How can the property management team decide who makes an ideal candidate for a long-term renter? There is not a secret formula, only subjective criterion that lends to further risk-taking. Some property managers make it a policy to not accept applicants if their credit report shows more than one derogatory issue.

We live in an age of debt. The average American has over six grand on credit cards. No bones about it. The remaining third of perspective renters have existing debt issues not because of foreclosure but other credit problems like child support, auto repos and defaulted student loans. It just seems many people are robbing Peter to pay Paul. Many people want to keep up with the Jones, not understanding the ramifications and so many live beyond their means, using credit cards to pay for expendable items. Many American families are living paycheck to paycheck and are living in limbo.

While a bankruptcy option such as Chapter 7 will allow many debt obligations to be forgiven, a foreclosure only forgives for mortgage debt. These actions cause further blemishes upon a credit rating for 7 to 10 years, which allows for a period of re-establishing credit but also until that happens, their credit rating is considered poor. Still some property managers will allow some renters with such credit issues on their record. These managers may ask for extra deposit, advance payment or a co-signer.

Times are tough all over. Bad things happen to good people all the time. It is how they learn from their mistakes that matter. Everyone needs a place to hang his or her hat. More and more people have imperfect credit and that does not mean that they will not make great tenants. If anything former homeowners will take pride in their surroundings.

On another note and as a last ditch effort, many banks offer money to struggling homeowners for their properties or cash-for-keys to avoid the foreclosure process. It is only wise that many homeowners should seek the assistance of their bank when trouble starts and before the foreclosure becomes inevitable. It is only smart to start looking for a rental before a foreclosure influences one's credit rating.