first of all I would suggest holding off buying until you get your debts paid off. When applying for a rental property and the landlord/property manager says they run a credit check, ask if they require a minimum FICO score or debt/income ratio. If they do and yours don't meet their minimum standards, you could offer to pay the last month's rent up front. For good advice on getting and staying out of debt, visit http://www.daveramsey.com.
Best of luck to you!
If your FICO score is below a 580, most likely you'll need to rent until you can get to that point or higher.
If you have had a lot of collection agencies coming after you , then you may have some problems even renting.You will probably have better chances renting directly from a property owner than a property management company.
A good lender can help you work on your credit, and direct you on which way to go.
Call me at 719-233-7733 if you have any questions.
These programs typically work with people who have dinged credit but would like to get into a house for long term rather than continue renting. A lease option essentially works like this: the tenant buyer (renter who wants to purchase the property) signs a lease with an option to buy the property within two years. During the lease period the tenant buyer works towards improving their score so that they can qualify for a loan at the end of the two year period.
There are a lot more details to a lease option/lease purchase/rent to own program and they vary by company. If you choose to go this route, make sure you do adequate research to protect yourself, your money and your option to buy the house. Also make sure that the company you choose to use is reputable.
Attached my company site with more information on lease options. We are specialists in this method of buying in Colorado Springs.
I hope this is helpful to you!