I agree to get your credit back on track and put yourself in a buying position where you get to pick from the full selection of homes available.
What your "first step should be", imo, is............ work on increasing that Bad" credit before even thinking of taking on more debt, even if it were possible.
Rent until you can buy a home in the normal manner.
Sit and talk with a loan officer....not sure how you're defining "bad credit", but you need to know how you can go about getting it to an acceptable level so that you will qualify for a loan when the times comes.
There are dangers lurking in a "rent with the option to buy" agreement.....you could lose the deposit money that will be required if you cannnot, or do not (for any reason) exercise your option to buy the home.
You may be asked to pay an amount of rent over and above the normal rent - only that part of the rent would be applied to the purchase price.......or............forfeited if you do not buy the home.
The price of the home is decided on now, not at the end of the 1 or 2 year lease.
Make sure you completely understand what it is you're asking for!
Hope that helps,
Square away your credit first then buy a home. If you work diligently you can repair your credit fairly quickly. A rent to own situation is very seller weighted. They get all the benefits you take all the risks.
A seller doing a rent to own, is a seller who is trying to sell their house for more money then its worth or the house is difficult to sell for another reason.
Be patient and take care of your credit first.
If you don't know what to do to fix your credit you need to find that out and get a time table as to how ling that will take. I would with debt consolidation companies if you need assistance.