How an Eviction Affects Your Credit

How an Eviction Affects Your Credit

Understanding how an eviction affects your credit is important if you’re working on rebuilding damaged credit history. The short answer is that an eviction won’t directly affect your credit report or credit score.

However, certain things caused by an eviction or as a result of it may appear on your credit report and new landlords may get a rental history report detailing your eviction. So, an eviction itself may not appear on your credit report, but new landlords will see your past history.

Let’s dive into this a bit more and see what you can do if it happens to you.

We researched & reviewed the best credit repair companies. They can help you dispute items on your report & improve your credit score.

What Exactly is an Eviction?

Eviction is a legal procedure and it isn’t a standard process in every state across the nation. In fact, eviction laws vary widely from town to town and city to city. If you’re facing eviction or having trouble paying rent, ensure you understand the laws by which you’re governed.

That said, in broad terms, an eviction is a legal process by which a landlord can remove a tenant from a lease and a property. The important thing to remember, regardless of what state you’re in, is that an eviction will not (and legally cannot) come as a surprise. There is notice and comment required on both the landlord and your part.

It’s important to respond to anything you receive from a court of law, regardless of how frivolous it seems. Your lack of response can often alter the rights you have in a particular case.

All people have the right to a domicile where they have been residing, regardless of payment. This is why an eviction is critical for a landlord. It is the state legally saying that you have forfeited your right to remain.

Back to Top

So it Doesn’t End up in my Credit Report?

The eviction itself does not. However, anything that is related to the eviction may be reported. There are a few ways that eviction-related items could end up on your report.

Judgements

Let’s say you get evicted for lack of paying rent and, after you move out, the landlord discovers a whole host of damage you caused in the home before you moved out. The landlord can sue you for that damage and, if a judge finds it appropriate, can issue a judgement against you requiring you to pay.

Judgements like these do show up on your credit report and do negatively affect your score. How much depends on the algorithm used and the size of the judgement itself. Judgements appear in the public records section of your report.

Collections

If you’ve been very late on your payments and have a large outstanding balance with your landlord, he may put you into collections. Again, this is a legal process that culminates with the court mandating that you pay according to a judgement of some kind. Collections will also appear on your credit report and will drastically reduce your score.

Either way, eviction information can remain on your credit report for up to seven years. If the statute of limitations is longer where you live, you could be looking at a longer run.

Back to Top

But my Landlord just Saw an Eviction on my Credit Report!

Likely not. Often, landlords will run a check on your application by using any number of the rental reporting bureaus, such as Experian’s RentBureau or TransUnion’s SmartMove. So, your credit report itself won’t have an eviction reported, but something akin to your report could.

Back to Top

What Options do I Have?

First of all, avoid the actual legal process of eviction at all costs. Renting or buying a home after an eviction can be extremely difficult, depending on your location.

This could mean anything from borrowing money to pay the rent to moving out voluntarily. Whatever you can do to avoid eviction is preferable.

Work Something Out

Your landlord is in the business of making money. It’s far easy for him or her if you simply pay your rent. If it’s your first time running into issues with rental payments, your landlord may be willing to work with you on a payment plan and help you get back to the black.

A handshake agreement of this kind is always preferable over a legal process for all parties concerned. It’s far cheaper, does not require lawyers and everyone walks away happy.

Do ensure, however, that any payment agreement you come to is in writing and notarized. Your landlord should not have any issue with this.

Move Out

The eviction process is long and expensive. Your landlord doesn’t want it and you don’t, either.

If you are unable to work out a payment plan with your landlord, consider simply moving out and calling it even. See if he will simply let you out of your lease and cut his losses. It’s highly likely that this is an attractive option for him.

Back to Top

So…It Won’t be on my Credit…?

Again, not so fast. Your landlord holds all the cards when it comes to deciding how to handle an eviction process. You have a right to remain in your home during the process, but this may make it more likely that your landlord takes action that could negatively impact your credit.

Back to Top

Spenser Smith

About Spenser Smith

Spenser is a finance writer living in Philadelphia, PA where he works for a financial services company, specializing in consumer credit. Spenser holds both a bachelor's and master's degree in economics.

Back to Top

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.