Introduction
If you lease a property and violate the terms of the agreement, your landlord might be able to evict you. Aside from leaving you with no place to stay, an eviction can also damage your credit score which would make it even more difficult to get a mortgage or take out a loan. Though an eviction doesn’t get reported to the reporting bureaus itself, the fallout from an eviction will be recorded.
A damaged credit score could also impact your ability to take out loans to pay rent. A good credit score is important to secure new loans and in some cases, even employers check your credit score to determine whether you are trustworthy or not. Future landlords also may inquire about your tenant history to figure out if you are reliable or not.
The implications are many but there’s no need to speculate. Let’s look at what happens to your credit score if you get evicted.
Does eviction show up in your credit report?
The actual eviction doesn’t get recorded in your credit report. However, if the landlord takes any action against it, then that will show up in your credit report.
- Collections: If your landlord decides to send your account to a third-party collection agency to earn the outstanding money due, that will get recorded on your report.
- Legal judgments: If your landlord decides to file a civil lawsuit and wins the judgment against you, that legal judgment is part of the public record and will also appear on your credit report.
If any of these activities show up in your records, you will have trouble qualifying for loans and also while renting another property. A collection action in your report card could be considered a red flag by potential lenders. If you have been evicted, you might also face issues trying to secure a home loan.
Additionally, landlords like to check prospective tenants for bad credit to ensure they don’t land in trouble later.
How long does an eviction stay on your record?
Whether it’s a civil lawsuit or a collection, the records will be noted in your report for up to seven years.
How does getting evicted affect your credit score?
If your landlord decides to take legal action against you, either by turning you into some collection agency or by filing a lawsuit, those actions will impact your credit score severely. One of the worst things that could happen to your credit report is being sent to a collection agency. The negative impact on your credit score could be significant and will remain on your record for about seven years.
The biggest factor affecting your credit score is your payment history, which accounts for 35% of your total credit score. If you were to pay off some of what you owe, some of the newer credit scoring models don’t include the new payoffs in their records. So you might want to settle with your landlord to make sure your credit isn’t affected by eviction.
How to get approved for rent with an eviction on your record?
If you are wondering how eviction would affect your future renting, there are a few things you should know. The eviction-related activity could make potential landlords think that you pose a security risk. The best approach while looking to rent is to rebuild your credit an eviction but in the interim, while you need a place to live, it’s best to be honest and upfront with your prospective landlord.
Conclusion
If a landlord has turned over your account to a collection agency, paying off the collection can help rebuild credit. Once the balance has been paid off, some of the newer credit-scoring models will it from your credit report. Additionally, it just looks better to future landlords and lenders that you have rectified the debt. We hope this helps you understand what an eviction could do to your credit score and what to do if you are facing eviction.
