Financial scams and renting to own

The building of good credit takes time, and young adults starting out on their own often find it tough to acquire basic household items without demonstrated credit. It's expensive to purchase a television or an apartment full of furniture, and putting away money to do so could take quite a long time, possibly years. Instead of saving money to buy merchandise, a large number of young consumers decide to take what appears to be the fast way out - acquiring their furnishings or appliances from a department store that advertises a "rent to own" option. But that rent to own furniture can turn out to be very expensive, indeed.

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With rent to own, the buyer pays weekly for a set length of time - typically 18 months to two years. The typical store will include a selection of home furnishings and appliances, such as refrigerators or washers and dryers. At the completion of the agreement, the renter is permitted to keep the item purchased. The buyer can pick out the furniture or appliances that she needs, sign the rental agreement and soon have that home full of furniture.

Is renting to own really any different from a credit card purchase over time? The idea of renting to own may sound appealing to a lot of people. 
 

The cost of renting to own can be deceiving; by the time you have finished the rental agreement, some eighteen months later, you will realize that you have in fact paid $750 for a $250 appliance. The lengthy amount of time required to "own" the furniture means that the rental company will receive far more money over the duration of the contract than the merchandise is worth. If you have rented one thousand dollars worth of furnishings, you may find that you have shelled out three thousand dollars for it by the time you actually own it. The rental price may appear to be reasonable, when only looking at the weekly price.

You may learn that the company has reported your lack of payment to the three credit bureaus, which could reduce your credit score and make it even harder to buy furnishings or appliances down the road. If you fail to make a payment, the products may be taken back by the rental store, leaving you with nothing to show for your money. It is easy to observe that renting to own is no bargain when you consider all of the financial characteristics of the rental process.

You want to be sure that renting helps you build credit so that you will have a simpler time buying in the future. Before signing up, make sure that you read over it carefully and understand all of the terms. There are times when it may make sense to employ a rent to own company. You ought to do some comparison shopping so that you are aware of exactly how much you are paying in comparison to the amount you would pay if you purchased the merchandise outright. Make sure that the rental store agrees to report your prompt payment to the credit bureaus.