<PAGE>   1
                                                                   EXHIBIT 10.1


                                                                          FINAL
                                                                        06/22/98


                      FIRST AMENDMENT TO CREDIT AGREEMENT

This FIRST AMENDMENT TO CREDIT AGREEMENT ("First Amendment") is made as of this
22nd day of June, 1998 by and among Alrenco, Inc., an Indiana corporation
("Company"), Comerica Bank-Texas and the other banks signatory hereto (
including the New Bank, each individually, a "Bank" and collectively, the
"Banks") and Comerica Bank, as agent for the Banks (in such capacity, "Agent").

                                    RECITALS

         A. Company, Agent and the Banks entered into that certain Alrenco
Amended and Restated Revolving Credit Agreement dated as of April 1, 1998 (the
"Credit Agreement") under which the Banks extended (or committed to extend)
credit to the Company, as set forth therein.

         B. The Company has requested that Agent and the Banks (i) increase the
amount of the Revolving Credit facility, (ii) add a bank (the "New Bank") as a
Bank under the Credit Agreement and (iii) make certain other amendments to the
Credit Agreement, and Agent and the Banks are willing to do so, but only on the
terms and conditions set forth in this First Amendment.

         NOW, THEREFORE, Company, Agent and the Banks agree:

         l.   Section 1 of the Credit Agreement is hereby amended, as follows:

                  (a)      New definition "EBITDA" is hereby added to the Credit
agreement as follows:

                           "EBITDA" of any Person shall mean, for any period,
                  EBITDAR of such Person minus, to the extent added in the
                  computation of such EBITDAR, the amount of all Rental
                  Expenses, determined in each case in accordance with GAAP."

                  (b)      New definition of "First Amendment Effective Date" 
is added, as follows:

                           "First Amendment Effective Date" shall mean the
                  date on which all conditions are satisfied to the
                  effectiveness of the First Amendment to Credit Agreement
                  dated as of June 22, 1998 executed and delivered by and among
                  the Company, the Banks and the Agent."



<PAGE>   2


                  (c)     The definition of "Interest Period" is amended by 
              adding in the second line thereof, between the words "three (3)"
              and "six (6)" the word "or" and deleting in the second line
              thereof, the words "or twelve (12)".

                  (d)      New definition of "Interest Rate Protection 
              Agreement" is added, as follows:

                           "`Interest Rate Protection Agreement(s)' shall mean
                  any interest rate, swap, cap, floor, collar, forward rate
                  agreement or other rate protection transaction, or any
                  combination of such transactions or agreements or any option
                  with respect to any such transactions or agreements now
                  existing or hereafter entered into by Company or any of its
                  Subsidiaries to manage existing or anticipated interest rate
                  risk and not for speculative purposes."

                  (e)      The definition of "Indebtedness" is amended and
              restated in its entirety, as follows:

                           "`Indebtedness' shall mean all indebtedness and
                  liabilities (including without limitation interest, fees and
                  other charges) arising under this Agreement or any of the
                  other Loan Documents, whether direct or indirect, absolute or
                  contingent, of Company or any Guarantor to any of the Banks
                  or to the Agent, in any manner and at any time, whether
                  evidenced by the Notes, arising under any Guaranty, or any of
                  the other Loan Documents, due or hereafter to become due, now
                  owing or that may hereafter be incurred by Company or any
                  Guarantor to, any of the Banks or by Agent, and all net
                  obligations with respect to Interest Rate Protection
                  Agreements entered into between Company and/or any of its
                  Guarantors and a Bank or an Affiliate of a Bank and any
                  judgments that may hereafter be rendered on such indebtedness
                  or any part thereof, with interest according to the rates and
                  terms specified, or as provided by law, and any and all
                  consolidations, amendments, renewals, replacements,
                  substitutions or extensions of any of the foregoing;
                  provided, however that for purposes of calculating the
                  Indebtedness outstanding under the Notes or any of the other
                  Loan Documents, the direct and indirect and absolute and
                  contingent obligations of the Company and the Guarantors
                  (whether direct or contingent) shall be determined without
                  duplication."

                  (f)      The definition of "Loan Documents" is amended by
              inserting in the second line thereof, immediately following the
              term "the Guaranty(ies), the words "and any Interest Rate
              Protection Agreements entered into between the Company and/or any
              of its Guarantors and a Bank or an Affiliate of a Bank".

                  (g)      The definition of "Revolving Credit Aggregate 
              Commitment" is amended and restated in its entirety, as follows:


                                       2
<PAGE>   3


                           "Revolving Credit Aggregate Commitment" shall mean
                  Eighty Million Dollars ($80,000,000) subject to the increase
                  of the Revolving Credit Aggregate Commitment, pursuant to
                  Section 2.10 hereof, by an amount up to the amount of the
                  Revolving Credit Optional Increase and subject to reduction
                  or termination pursuant to Section 2.8 or 10.2 hereof."

                  (h) The definition of "Revolving Credit Optional Increase" is
         amended and restated in its entirety, as follows:

                           "Revolving  Credit  Optional  Increase"  shall  mean
                  an amount up to Twenty Million Dollars ($20,000,000)."

                  (i) New definition of "Total Debt to EBITDA Ratio" is added
         as follows:

                           "Total Debt to EBITDA Ratio" shall mean as of the
                  end of each fiscal quarter, a ratio (i) the numerator of
                  which shall be equal to Total Debt as of the last day of such
                  fiscal quarter and (ii) the denominator of which shall be
                  EBITDA for the Measuring Period then ending. For the purposes
                  of this definition, " EBITDA for the Measuring Period then
                  ending" shall mean (x) for the fiscal quarter ending on June
                  30, 1998, EBITDA for the period beginning on January 1, 1998
                  and ending on June 30, 1998 multiplied by 2.00; (y) for the
                  fiscal quarter ending on September 30, 1998, EBITDA for the
                  period beginning on January 1, 1998 and ending on September
                  30, 1998 multiplied by 1.33; and (z) for the fiscal quarter
                  ending on December 31, 1998 and for each subsequent fiscal
                  quarter, EBITDA for the four preceding fiscal quarters."

         2.       Section 7 is  amended  by adding a new  Section  7.22  
immediately following Section 7.21, as follows:

                  "7.22 Year 2000 Requirement. The Company and its Guarantors
         have reviewed the areas in their business and operations which could
         be adversely affected by, and have developed or are developing a
         program to address on a timely basis the risk that computer
         applications used by the Company and its Guarantors may be unable to
         recognize and perform properly date-sensitive functions involving
         certain dates prior to and any date after December 31, 1999. Any
         reprogramming required to permit the proper functioning, in and
         following the year 2000, of (i) the Company's and its Guarantors'
         computer systems and (ii) equipment containing embedded microchips
         (including systems and equipment supplied by others or with which the
         Company's or any Guarantor's systems interface) and the testing of all
         such systems and equipment, as so reprogrammed, will be completed by
         September 30, 1999. The cost to the Company and its Guarantors of such
         reprogramming and testing and of the 

                                       3
<PAGE>   4

         reasonably foreseeable consequences of year 2000 to the Company and
         its Guarantors (including, without limitation, reprogramming errors
         and the failure of others' systems or equipment) will not result in a
         Default or a Material Adverse Effect. Except for such of the
         reprogramming referred to in the preceding sentence as may be
         necessary, the computer and management information systems of the
         Company and its Guarantors are and, with ordinary course upgrading and
         maintenance, will continue for the term of this Agreement to be,
         sufficient to permit the Company and its Guarantors to conduct their
         business without Material Adverse Effect."

         3.       New Section 8.12A is added to the Credit Agreement  
immediately following Section 8.12 thereof, as follows:

                  "8.12A Total Debt to EBITDA Ratio. Maintain, as of the last
         day of each fiscal quarter, a Total Debt to EBITDA Ratio of not more
         than the ratio set forth below as of the last day of the applicable
         fiscal quarter set forth below:
<TABLE>
<CAPTION>

-------------------------------------------------------------------------------

          QUARTER(S) ENDING                          RATIO
-------------------------------------------------------------------------------

<S>                                              <C> 
 June 30, 1998 and September 30, 1998             4.0 to 1.0
-------------------------------------------------------------------------------

   December 31, 1998 and thereafter               3.5 to 1.0
-------------------------------------------------------------------------------
</TABLE>

         4. Section 9.1 (Indebtedness) of the Credit Agreement is amended by
deleting the word "and" at the end of clause (i) thereof, redesignating "clause
(j)" as "clause (k)" and adding a new "clause (j)" immediately following clause
(i), as follows:

                  "(j)     Interest Rate Protection Agreements; and".

         5.       Section  9.2 (Liens) is amended by amending  and  restating 
in its entirety Section 9.2(d) as follows:

                  "(d)     Liens in favor of  Agent,  as  Security  for the  
         Indebtedness, and Liens in favor of a Bank or an Affiliate of any Bank,
         as Security for Interest Rate Protection Agreements,"

         6.       Section 9.7  (Limitation  on Capital  Expenditures)  is 
amended and restated in its entirety as follows:

                  "9.7 Limitation on Capital Expenditures. Except in connection
         with the Merger, make or commit to make (by way of the acquisition of
         securities of a Person or otherwise) any expenditure in respect of the
         purchase or other acquisition of fixed or capital assets except for:

                                       4

<PAGE>   5

                           (a) acquisitions permitted by Section 9.4, to the
            extent assets are acquired pursuant to such acquisitions which
            constitute Capital Expenditures;

                           (b) expenditures in the ordinary course of business
            (but excluding expenditures in respect of any asset acquired in
            connection with normal replacement and maintenance programs properly
            charged to current operations) not exceeding, in the aggregate for
            the Company and its Subsidiaries (i) during fiscal year 1998,
            $6,000,000 and (ii) during any fiscal year thereafter, $3,000,000;
            and

                           (c) expenditures in respect of any asset acquired in
            connection with normal replacement and maintenance programs properly
            charged to current operations, not exceeding, in the aggregate for
            the Company and its Subsidiaries during any fiscal year, 1.5% of
            "Total Revenues" of the Company for such fiscal year as such "Total
            Revenues" are reported in its 10-Q and 10-K Reports filed with the
            U.S. Securities and Exchange Commission.

         7. Section 9.8 (Limitation on Investments) is amended by adding a new
clause (h) immediately following clause (g) (but before the period) as follows:

                  ";  and

            (h)      Interest Rate Protection Agreements".

         8. Section 14.12 of the Credit Agreement is hereby amended by
inserting in the parenthetical which begins of the second line thereof,
immediately following the word "employees", the words "or to employees of any
of its Affiliates".

         9. Section 13.13 (Co-Agent) is hereby amended and restated in its
entirety as follows:

                  "13.13 Co-Agent and Documentation Agent. Bank One, Texas,
         N.A. has been designated by the Company as "Co-Agent" and
         NationsBanks, N.A. has been designated by the Company as
         "Documentation Agent", each under this Agreement. Other than their
         respective rights, powers, obligations, liabilities, responsibilities,
         remedies and duties as a Bank hereunder, neither the Co-Agent nor the
         Documentation Agent shall have any administrative, collateral or other
         rights, powers, obligations, liabilities, responsibilities or duties
         hereunder, provided, however, that Co-Agent and the Documentation
         Agent shall be entitled to the benefits afforded to the Agent under
         Sections 13.5 and 13.6 hereof."

         10. This First Amendment shall become effective (the "First Amendment
Effective Date") (according to the terms and as of the date hereof) upon
satisfaction by the Company of the following conditions:



                                       5
<PAGE>   6

         (a)      Agent shall have received:

                           (i) counterpart originals of this First Amendment,
                  in each case duly executed and delivered by Company, and the
                  Banks (including the New Bank), in form satisfactory to Agent
                  and the Banks;

                           (ii) new Notes or renewal and replacement Notes (the
                  "New Notes") substantially in the form of Exhibit B to the
                  Credit Agreement, payable to the order of each of the Banks
                  in the face amount of each such Bank's Percentage of the
                  Revolving Credit Aggregate Commitment as set forth in
                  Attachment I (Exhibit 1.2 -- Percentages) hereto;

                           (iii) certified copies of resolutions of the Boards
                  of Directors of each of the Company and each of the
                  Guarantors authorizing, as applicable, the execution and
                  delivery of this First Amendment, the New Notes and the other
                  Loan Documents required under this clause (a) and the
                  performance by the Company and the undersigned Guarantors of
                  each of their respective obligations under the Credit
                  Agreement as amended by this First Amendment and the new
                  Notes; and

                           (iv) an opinion of counsel to the Company and the
                  Guarantors.

                  (b) Company shall have paid to Agent, for distribution to the
         Banks, as applicable (i) all interest, fees (including the Revolving
         Credit Commitment Fee) and other amounts, if any, accrued to the First
         Amendment Effective Date and (ii) all fees referenced in Agency Fee
         Letter dated December 9, 1997.

         11.      New Schedule 1.2 (setting forth the applicable Percentages as
revised hereunder) attached hereto as Attachment I shall replace existing
Schedule 1.2 in its entirety.

         12.      By its execution of this First Amendment, the New Bank hereby

                  (a) confirms that it has received a copy of the Credit
         Agreement and the exhibits and schedules referred to therein, and all
         other Loan Documents which it considers necessary, together with
         copies of the other documents which were required to be delivered
         under the Credit Agreement as a condition to the making of the loans
         thereunder;

                  (b) acknowledges and agrees that it: (i) has made and will
         continue to make such inquiries and has taken and will take such care
         on its own behalf as would have been the case had its commitment been
         granted and its loans been made directly by such New Bank to the
         Company without the intervention of the Agent or any other Bank; and
         (ii) has made and will 

                                       6

<PAGE>   7

         continue to make, independently and without reliance upon the Agent or
         any other Bank, and based on such documents and information as it has
         deemed appropriate, its own credit analysis and decisions relating to
         the Credit Agreement;

                 (c) acknowledges and agrees that the Agent has not made any
         representations or warranties about the creditworthiness of the
         Company or any other party to the Credit Agreement or any other of the
         Loan Documents, or with respect to the legality, validity, sufficiency
         or enforceability of the Credit Agreement, or any other of the Loan
         Documents; and

                  (d) represents and warrants that it is a Person to which
         assignments are permitted pursuant to Sections 14.8(c) and (d) of the
         Credit Agreement.

         13. Concurrently with the First Amendment Effective Date pursuant to
Section 10 hereof, each Bank (including the New Bank) shall have (i) a
Percentage equal to the percentage set forth in Attachment I hereto and (ii)
Revolving Loans (and participation in Letters of Credit) in its Percentage of
all Revolving Loans (and Letters of Credit) outstanding on the First Amendment
Effective Date. To facilitate the foregoing, each Bank (including the New Bank)
which as a result of the adjustments of Percentages evidenced by Attachment I
is to have a greater principal amount of Revolving Loans outstanding than such
Bank had outstanding under the Credit Agreement immediately prior to the First
Amendment Effective Date shall deliver to the Agent immediately available funds
to cover such Revolving Loans (and the Agent shall, to the extent of the funds
so received, disburse funds to each Bank which, as a result of the adjustment
of the Percentages, is to have a lesser principal amount of Revolving Loans
outstanding than such Bank had under the Credit Agreement immediately prior to
the First Amendment Effective Date). Each Bank which was a party to the Credit
Agreement prior the First Amendment Effective Date, upon receipt of its New
Note(s) (which Notes are to be in exchange for and not in payment of the
predecessor Revolving Credit Notes) issued by the Company to such Bank, shall
return its predecessor Revolving Credit Notes and, if applicable, its Swing
Line Note, to the Agent which shall stamp such Notes "Exchanged" and deliver
said Notes to the Company. The New Bank agrees that all interest and fees
accrued under the Credit Agreement prior to the First Amendment Effective Date
are the property of the Banks which were parties to the Credit Agreement prior
to the First Amendment Effective Date. Letter of Credit Fees paid prior to the
First Amendment Effective Date shall not be recalculated, redistributed or
reallocated by Agent to the Banks.

         14. Each of Company and the undersigned Guarantor hereby represents
and warrants that, after giving effect to the amendments contained herein, (a)
execution and delivery of this First Amendment, the New Notes (as defined
above) and the other Loan Documents required to be delivered hereunder, and the
performance by the Company of its obligations under the Credit Agreement as
amended hereby (herein, as so amended, the "Amended Credit Agreement") are
within such undersigned's corporate powers, have been duly authorized, are not
in contravention of law or


                                       7
<PAGE>   8

the terms of its articles of incorporation or bylaws or other organic documents
of the parties thereto, as applicable, and except as have been previously
obtained (or as referred to in Section 7.13 of the Amended Credit Agreement) do
not require the consent or approval, material to the amendments contemplated in
this First Amendment or the Amended Credit Agreement, of any governmental body,
agency or authority, and this First Amendment, the Amended Credit Agreement,
the New Notes and the other Loan Documents required to be delivered hereunder,
will constitute the valid and binding obligations of such undersigned parties
enforceable in accordance with its terms, except as enforcement thereof may be
limited by applicable bankruptcy, reorganization, insolvency, moratorium, ERISA
or similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity (whether enforcement is sought in a proceeding in
equity or at law), and (b) the continuing representations and warranties set
forth in Sections 7.1 through 7.22, inclusive, of the Amended Credit Agreement
are true and correct on and as of the date hereof, and such representations and
warranties are and shall remain continuing representations and warranties
during the entire life of the Amended Credit Agreement.

         15. Except as specifically set forth above, this First Amendment shall
not be deemed to amend or alter in any respect the terms and conditions of the
Credit Agreement, any of the Notes issued thereunder or any of the other Loan
Documents, or to constitute a waiver by the Banks or Agent of any right or
remedy under or a consent to any transaction not meeting the terms and
conditions of the Credit Agreement, any of the Notes issued thereunder or any
of the other Loan Documents.

         16. Unless otherwise defined to the contrary herein, all capitalized
terms used in this First Amendment shall have the meaning set forth in the
Credit Agreement.

         17. This First Amendment may be executed in counterpart in accordance
with Section 14.10 of the Credit Agreement.

         18. This First Amendment shall be construed in accordance with and
governed by the laws of the State of Michigan.


                    [SIGNATURES FOLLOW ON SUCCEEDING PAGES]



                                       8
<PAGE>   9


         WITNESS the due execution hereof as of the day and year first above
written.


COMERICA BANK,                              ALRENCO, INC.
  as Agent


By:                                         By:
   ----------------------------                ----------------------------

Its:                                        Its:
   ----------------------------                ----------------------------

One Detroit Center
9th Floor - MC 3289
500 Woodward Avenue
Detroit, Michigan 48226-3289
Attention: Corporate Finance


BANKS:                                      COMERICA BANK-TEXAS



                                            By:
                                               ----------------------------

                                            Its:
                                                ---------------------------



                                            BANK ONE, TEXAS, N.A.


                                            By:
                                               ----------------------------

                                            Its:
                                                ---------------------------


                                             NATIONSBANK, N.A.


                                            By:
                                               ----------------------------

                                            Its:
                                                ---------------------------


                                       9
<PAGE>   10


                          Acknowledgment of Guarantors

         Each of the undersigned, an authorized officer of RTO Operating, Inc.
("RTO Operating"), Action Rent-To-Own Holdings of South Carolina, Inc.
("Action"), RTO Holding Co. ("RTO Holding") or, ATRO, Inc. ("ATRO, and
individually with each of RTO Operating, Action, and RTO Holding a "Guarantor",
and any or all of them, collectively the "Guarantors"), respectively, hereby
acknowledges on behalf of the Guarantor for which it is an authorized officer
that (a) the applicable Guarantor executed a Guaranty dated as of April 1, 1998
pursuant to which such Guarantor guaranteed the obligations of Alrenco, Inc.
(the "Company"), under that certain Alrenco Amended and Restated Credit
Agreement dated as of April 1, 1998 (the "Credit Agreement") by and among the
Company, certain financial institutions (the "Banks") and Comerica Bank as
agent for the Banks (the "Agent"), (b) the Company, the Banks (including the
New Bank, as defined therein) and the Agent have executed a First Amendment
dated as of date hereof (the "First Amendment") to such Credit Agreement (the
Credit Agreement as amended thereby, the "Amended Credit Agreement"). The
undersigned hereby ratifies and confirms, on behalf of the applicable
Guarantor, such Guarantor's obligations under the Amended Credit Agreement, and
agrees that the applicable Guaranty remains in full force and effect after
giving effect to the effectiveness of the First Amendment and that, upon such
effectiveness, all references in such Amended Credit Agreement to the "Credit
Agreement" or the "Notes" issued thereunder shall be references to the Amended
Credit Agreement and the Notes issued thereunder. Capitalized terms not
otherwise defined herein will have the meanings given in the Amended Credit
Agreement. This acknowledgment shall be governed by and construed in accordance
with the laws of, and be enforceable in, the State of Michigan.

         Dated as of the 22nd day of June, 1998.


RTO OPERATING, INC.

By:
   --------------------------
Its:                                                RTO HOLDING CO., INC.
    -------------------------                       By:
                                                       ------------------------
ACTION RENT-TO-OWN HOLDINGS                         Its: 
 OF SOUTH CAROLINA, INC.                                -----------------------

By:                                         
   ----------------------------             
Its:                                                ATRO, INC.
   ----------------------------             
                                                    By:
                                                       ------------------------
                                                    Its:
                                                        -----------------------


                                      10




<PAGE>   11

                                  ATTACHMENT 1
                   [Replacement Schedule 1.2 -- Percentages]



<TABLE>
<CAPTION>
-------------------------------------------------------------------------------

       BANK                         PERCENTAGE          ALLOCATION
-------------------------------------------------------------------------------

<S>                                    <C>              <C>        
Comerica Bank- Texas                   43.75%           $35,000,000
-------------------------------------------------------------------------------

Bank One, Texas, N.A.                  31.25%           $25,000,000
-------------------------------------------------------------------------------

NationsBank, N.A.                      25.00%           $20,000,000
-------------------------------------------------------------------------------

TOTAL                                 100.00%           $80,000,000
=====                                 ======            ===========
-------------------------------------------------------------------------------

</TABLE>



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