<PAGE>   1

                                                                    Exhibit 10.2


                       THIRD AMENDMENT TO CREDIT AGREEMENT


         THIS THIRD AMENDMENT TO CREDIT AGREEMENT is dated as of July ___, 1998
(the "Third Amendment") and is made by and among RENT-WAY, INC., a Pennsylvania
corporation (the "Borrower"), each of the GUARANTORS, each of the BANKS (as
defined in the Credit Agreement defined below), NATIONAL CITY BANK OF
PENNSYLVANIA in its capacity as syndication agent and administrative agent for
the Banks under the Credit Agreement (hereinafter referred to in such capacity
as the "Agent"), and NATIONSBANK, N.A., in its capacity as documentation agent
for the Banks.

                                   WITNESSETH:

         WHEREAS, the Borrower, the Guarantors, the Banks and the Agent entered
into that certain Credit Agreement dated as of November 22, 1996, as amended by
a First Amendment to Credit Agreement dated as of January 31, 1997, and a Second
Amendment to Credit Agreement dated as of February 5, 1998 (the Credit
Agreement, as amended by the First Amendment and the Second Amendment being
hereafter referred to as the "Credit Agreement");

         WHEREAS, defined terms used herein and not otherwise defined herein
shall have the meanings given to them in the Credit Agreement;

         WHEREAS, the Borrower has proposed to sell certain subordinated
debentures in the principal amount of $75,000,000;

         WHEREAS, in connection with the proposed issuance of such debentures,
the Borrower has requested the Agent and the Banks consent to the Borrower
incurring additional indebtedness evidenced by the debentures. The Borrower has
also requested that the Agent and the Banks amend the net worth covenant set
forth in the Credit Agreement; and

         WHEREAS, the parties hereto desire to amend the Credit Agreement to
accommodate the Borrower's issuance of certain debentures and to modify the net
worth covenant of the Borrower, subject to the terms and conditions hereof and
as more fully provided herein.

         NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, covenant and agree as follows:

         1. Amendments to Credit Agreement. The Credit Agreement is amended as
set forth below effective on the date set forth in Section 6 hereof:

         (a) Amended and Restated Definitions (Section 1.1). The following
definitions now contained in Section 1.1 of the Credit Agreement are hereby
amended and restated to read as set forth below:

              "Base Net Worth shall mean the sum of $90,000,000 plus the amounts
set forth in (i), (ii) and (iii) below which occur during the period from March
31, 1998, through the 



<PAGE>   2



date of determination: (i) 75% of consolidated net income without regard to
extraordinary items of gain or loss of the Borrower and its Subsidiaries for
each fiscal quarter in which net income was earned (as opposed to a net loss),
(ii) 90% of any increase in the Consolidated Net Worth resulting from a
Permitted Acquisition, and (iii) 90% of the amount of the net proceeds received
by the Loan Parties from any offering consummated with respect to equity
securities of the Borrower.

              Subordinated Debt shall mean (i) Indebtedness of the Borrower to
the Securityholders (as such term is defined in the NWB Indenture) and their
successors and assigns, evidenced by the NWB Subordinated Loan Documents and
subject to the subordination terms set forth in Section 11 thereof, (ii)
Indebtedness of the Loan Parties to Persons which sell ownership interests or
assets to the Loan Parties under a Permitted Acquisition in accordance with
Section 8.2.6, and (iii) Indebtedness permitted under Section 8.2.1(vii).

              Subordinated Loan Documents shall mean (i) the NWB Subordinated
Loan Documents, (ii) all agreements evidencing the Subordinated Debt owed to
Persons which sell ownership interests or assets to the Loan Parties under a
Permitted Acquisition in accordance with Section 8.2.6, and (iii) all agreements
evidencing the Subordinated Debt owed to Persons which acquire any of the
Indebtedness permitted under Section 8.2.1(vii)."

         (b) New Definitions (Section 1.1). The following new definitions are
hereby added to Section 1.1 of the Credit Agreement in alphabetical order:

              "Consolidated Net Worth shall mean, as of any date of
determination, total stockholders' equity plus preferred stock (to the extent it
is not already included in the stockholders' equity) of the Borrower and its
Subsidiaries as of such date, determined and consolidated in accordance with
GAAP.

              Permitted Debentures Sales shall mean the Borrower's incurrence of
Indebtedness and related issuance of debentures which meet all of the following
criteria: (i) such Indebtedness is subordinated to the Obligations (including,
without limitation, all obligations of the Borrower to the Banks under Interest
Rate Protection Agreements) on standard terms of subordination acceptable to the
Required Banks, which terms shall include, without limitation, the right of the
Banks upon the occurrence of an Event of Default to block payments on such
Indebtedness for a minimum of 179 days at least one time in any 365 day period,
(ii) the interest rate payable with respect to such Indebtedness does not exceed
six and one-half percent (6-1/2%) per annum, (iii) the scheduled maturity date
of all the principal amount of such Indebtedness is a date not less than seven
years from the date of issuance, (iv) until the Obligations are paid in full and
the Commitments have terminated, no prepayment can be made with respect to such
Indebtedness, (v) the covenants in the Subordinated Loan Documents relating to
such Indebtedness are not more restrictive than the covenants set forth in this
Agreement, and (vi) the net proceeds of such Indebtedness are used to repay
principal and interest outstanding on the Loans .



                                      -2-
<PAGE>   3


              Third Amendment shall mean this Third Amendment to Credit
Agreement, dated as of July ___, 1998, as the same may be supplemented or
amended from time to time, including all schedules and exhibits thereto.

              Third Amendment Effective Date shall have the meaning given to
such term in Section 6 of this Third Amendment."

         (c) Obsolete Definitions (Section 1.1). The following definition
is hereby deleted in Section 1.1 of the Credit Agreement and shall be of no
force or effect with respect to the terms of the Credit Agreement: "Consolidated
Tangible Net Worth".

         (d) Amendment to Section 8.2.1. Section 8.2.1 of the Credit
Agreement is hereby amended and restated to read as follows:

              "8.2.1 Indebtedness.

              Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Indebtedness, except:

              (i) Indebtedness under the Loan Documents;

              (ii) Existing Indebtedness as set forth on Schedule 8.2.1 as of
February 5, 1998 (including any extensions or renewals thereof, provided there
is no increase in the amount thereof or other significant change in the terms
thereof subsequent to February 5, 1998, unless otherwise specified on Schedule
8.2.1);

              (iii) Capitalized and operating leases as and to the extent
permitted under Section 8.2.15;

              (iv) Indebtedness secured by Purchase Money Security Interests not
exceeding $100,000;

              (v) Indebtedness of a Loan Party to another Loan Party which is
subordinated in accordance with the provisions of Section 8.1.12;

              (vi) Indebtedness incurred in connection with Permitted
Acquisitions provided that after giving effect thereto, no Potential Default or
Event of Default exists, and

              (vii) Indebtedness incurred under Permitted Debenture Sales not
exceeding $75,000,000 in the aggregate plus an additional $11,250,000 in an
overallotment option, provided that after giving effect to the sale of such
debentures, no Potential Default or Event of Default exists."

         (e) Amendment to Section 8.2.5. Section 8.2.5 to the Credit
Agreement is hereby amended and restated to read as follows:




                                      -3-
<PAGE>   4




         "8.2.5 Dividends and Related Distributions.

              Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, make or pay, or agree to become or remain liable to make or
pay, any dividend or other distribution of any nature (whether in cash,
property, securities or otherwise) on account of or in respect of its shares of
capital stock, partnership interests or limited liability company interests on
account of the purchase, redemption, retirement or acquisition of its shares of
capital stock (or warrants, options or rights therefor), partnership interests
or limited liability company interests, except that (i) the Loan Parties may pay
dividends or other distributions payable to another Loan Party, and (ii) the
Borrower may pay principal, interest or dividends on the Subordinated Debt,
subject to (i) the restrictions on prepayments in Section 8.2.23 and (ii) the
restrictions on payments contained in the subordination and other provisions
contained in the Subordinated Loan Documents. "

         (f) Amendment of Section 8.2.13. Section 8.2.13 is hereby amended
and restated to read as follows:

              "8.2.13 Issuance of Stock.

              Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, issue any additional shares of its capital stock or any
options, warrants or other rights in respect thereof, except that the Borrower
may issue additional shares of capital stock (i) for Permitted Acquisitions in
accordance with the provisions of Section 8.2.6, (ii) for distribution to
employees as provided for under the stock option plans set forth on Schedule
6.1.21 as in effect on the Closing Date, (iii) in connection with the conversion
of Indebtedness incurred pursuant to Permitted Debenture Sales into capital
stock of the Borrower, or (iv) if the net proceeds of the issuance are used by
the Borrower to reduce (a) the Loans outstanding under this Agreement, and (b)
the Commitments of the Banks."

         (g) Amendment to Section 8.2.19. Section 8.2.19 to the Credit
Agreement is hereby amended and restated to read as follows:

              "8.2.19 Minimum Net Worth.

              The Borrower shall not at any time permit Consolidated Net Worth
to be less than the Base Net Worth."


         (h) Amendment of Section 8.2.20. Section 8.2.20 is hereby amended
and restated to read as set forth below:

              "8.2.20 Fixed Charge Coverage; Subordinated Loan Document
Amendments.

              The Borrower shall not at any time permit the Fixed Charge
Coverage Ratio to be less than 1.2 to 1.0. For purposes of this ratio,
Consolidated Cash Flow from 



                                      -4-
<PAGE>   5


Operations, Occupancy Expense, Rental Merchandise depreciation and Fixed Charges
shall be calculated based upon the fiscal quarter ended March 31, 1998,
multiplied by four (for the fiscal quarter ended March 31, 1998); the fiscal
quarters ended March 31, 1998 and June 30, 1998, multiplied by two (for the
fiscal quarter ended June 30, 1998); the fiscal quarters ended March 31, 1998,
June 30, 1998 and September 30, 1998, multiplied by one and one-third (for the
fiscal quarter ended September 30, 1998); and thereafter, for the four fiscal
quarters of the Borrower then ended (for the fiscal quarter ended December 31,
1998 and thereafter). The Loan Parties shall not amend the terms of the NWB
Subordinated Loan Documents without the prior written consent of the Agent. The
Loan Parties shall not amend the Subordinated Loan Documents with respect to any
Indebtedness permitted under Section 8.2.1(vii) in a manner such that the
Indebtedness would cease to meet the requirements for such Indebtedness under
the definition of "Permitted Debenture Sales"."

         (i) Amendments to Exhibits to Credit Agreement. The following
Exhibit to the Credit Agreement is hereby amended and restated in its entirety
in the form of such Exhibit attached hereto:

              Exhibit 8.3.4 Quarterly Compliance Certificate

         (j) Amendments to Schedules to Credit Agreement. The following
Schedule to the Credit Agreement is hereby amended and restated in its entirety
in the form of such Schedule attached hereto:

              Schedule 6.1.2 - Capitalization

     2. Waivers Regarding Tangible Net Worth. The Loan Parties and the Banks
acknowledge and agree that the restatement of the Consolidated Tangible Net
Worth covenant set forth in former Section 8.2.19 to the Consolidated Net Worth
covenant set forth in restated Section 8.2.19, as set forth in this Section 1(g)
above, shall be effective on and as of March 31, 1998.

     3. Conditions Precedent. The provisions contained in Sections 1 and 2 of
this Amendment shall not become effective until each of the conditions set forth
in this Section 3 has been satisfied.

         (a) Satisfaction of Conditions in Section 6(a). Each of the conditions
set forth in Section 6(a) hereof (execution of this Amendment and completion of
Schedules and Exhibits hereto) shall have been satisfied.

         (b) Secretary's Certificates. The Secretary or Assistant Secretary of
the Borrower and each other Loan Party shall execute and deliver to the Agent
for the benefit of the Banks a certificate dated as of the date hereof,
certifying as to:

              (i) all corporate action taken by it in connection with the
documents executed and delivered pursuant to this Amendment;



                                      -5-

<PAGE>   6



              (ii) the names of the officer or officers authorized to sign this
Amendment and the related documents and the true signatures of such officer or
officers and specifying the Authorized Officers permitted to act on behalf of
them for purposes of this Amendment and the true signatures of such officers, on
which the Agent and each Bank may conclusively rely; and

              (iii) copies of the organizational documents of, including the
certificate of incorporation, bylaws and corporate resolutions as in effect on
the Third Amendment Effective Date, together with certificates from the
appropriate state officials as to the continued existence and good standing of
it in each state where it is organized.

         (c) Opinion of Counsel. Hodgson Russ Andrews Wood & Goodyear, LLP,
counsel for the Borrower, shall have delivered to the Agent for the benefit of
each Bank a written opinion dated as of the date hereof and in form and
substance satisfactory to the Agent and its counsel as to the matters set forth
in Exhibit 3(c) hereto.

         (d) Fees and Expenses. Borrower shall have paid all outstanding
fees and expenses due to the Agent or the Banks, including the fees of Agent's
counsel in connection with this Amendment.

         (e) Legal Details. All legal details and proceedings in connection
with the transactions contemplated by this Amendment and the other Loan
Documents shall be in form and substance satisfactory to the Agent and counsel
for the Agent, and the Agent shall have received all such other counterpart
originals or certified or other copies of such documents and proceedings in
connection with such transactions, in form and substance satisfactory to the
Agent and said counsel, as the Agent or said counsel may reasonably request.

     4. Full Force and Effect. The Credit Agreement and each of other
Loan Documents shall remain in full force and effect on and after the date of
this Amendment except as expressly amended hereby or pursuant hereto. On and
after the date hereof, each reference in the Credit Agreement to "this
Agreement", "hereunder" or words of like import shall mean and be a reference to
the Credit Agreement, as amended by this Amendment, and each reference in each
other Loan Document to the "Credit Agreement" shall mean and be a reference to
the Credit Agreement, as previously amended and as amended by this Amendment.
The parties hereto do not amend or waive any provisions of the Credit Agreement
or the other Loan Documents except as expressly set forth herein.

     5. Counterparts. This Amendment may be executed by different
parties hereto on any number of separate counterparts, each of which, when so
executed and delivered, shall be an original, and all such counterparts shall
together constitute one and the same instrument.

     6. Effective Date.

         (a) Third Amendment Effective Date. Except as otherwise provided in
Section 2 above, all provisions of this Amendment shall be effective on the date
on which the conditions listed in (i) and (ii) below have been satisfied and
each of the conditions precedent 


                                      -6-

<PAGE>   7


in Section 3 above have occurred or been waived by the Banks (the "Third
Amendment Effective Date"):

              (i) Execution and Delivery. this Amendment has been executed, in
counterparts or otherwise, and delivered to the Agent for the benefit of the
Banks; and

              (ii) Completion of Schedules and Exhibits. Each of the Schedules
and Exhibits hereto has been completed and attached hereto.


                      [SIGNATURES APPEAR ON THE NEXT PAGE]




                                      -7-
<PAGE>   8





             [SIGNATURE PAGE TO THIRD AMENDMENT TO CREDIT AGREEMENT]


         IN WITNESS WHEREOF, the parties hereto, by their officers thereunto
duly authorized, have executed this Amendment as of the day and year first above
written.

                                        RENT-WAY, INC., "Borrower"



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

                                        Title:
                                              -------------------------



                                        CHAMPION RENTALS, INC., "Guarantor"



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

                                        Title:
                                              -------------------------




                                        NATIONAL CITY BANK OF PENNSYLVANIA, 
                                        individually and as Agent



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

                                        Title:
                                              -------------------------




                                        NATIONSBANK, N.A., individually and as 
                                        documentation agent for the Banks


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

                                        Title:
                                              -------------------------





<PAGE>   9



             [SIGNATURE PAGE TO THIRD AMENDMENT TO CREDIT AGREEMENT]



                                        LASALLE NATIONAL BANK



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

                                        Title:
                                              -------------------------



                                        HARRIS TRUST AND SAVINGS BANK



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

                                        Title:
                                              -------------------------




                                        SUNTRUST BANK, CENTRAL FLORIDA, 
                                        NATIONAL ASSOCIATION



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

                                        Title:
                                              -------------------------









<PAGE>   10



             [SIGNATURE PAGE TO THIRD AMENDMENT TO CREDIT AGREEMENT]



                                        MANUFACTURERS AND TRADERS TRUST COMPANY



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

                                        Title:
                                              -------------------------




                                        CORESTATES BANK, N.A.



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

                                        Title:
                                              -------------------------




                                        STAR BANK, N.A.



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

                                        Title:
                                              -------------------------




<PAGE>   11






                         LIST OF SCHEDULES AND EXHIBITS


             Schedules

             Schedule 6.1.2  -   Capitalization

             Exhibits

             Exhibit 3(c)    -   Opinion of Hodgson, Russ, Andrews, Wood &
                                 Goodyear, LLP

             Exhibit 8.3.4   -   Quarterly Compliance Certificate