Establishing an excellent credit score seems to be a challenge these days. Maintaining a good credit score seems like an achievement with several economic changes coupled with governmental policies.
If you’re facing eviction, you may be worried about the notice impacting your credit report and score. It’s a human response to such an occurrence. If you’re looking for answers, you’re in the right place.
This article explores some of your essential questions about evictions and how they can impact your credit.
What Is an Eviction?
Eviction is a process where a property owner (landlord, if you like) can remove a tenant from the property, terminating their usage of it. An eviction is primarily a legal procedure that is executed when the tenant carries out violations.
A landlord cannot serve eviction notices to tenants without a valid reason – that must be under the resident state laws. There are several reasons why landlords serve eviction notices to tenants. They include:
Using the property for illicit purposes
Subleasing the property with approval from the landlord
Using a residential property for business and vice versa
Failure to pay rent
A repeated habit of late payment of rent
Physically damaging the property
Constantly disturbing the peace and inconveniencing other tenants
Harboring plenty of persons in the apartment.
Before an apartment is leased to a tenant, some terms and conditions must be followed in their contract. If these conditions are breached in any way, the landlord may issue an eviction notice.
What Does an Eviction Do to Your Credit?
The common misconception is that evictions show up on your credit report. That is not the case. Eviction records are kept in a separate rental history report – which tenant screening companies can obtain from any credit bureaus. So, yes, evictions do not impact your credit score. However, there are a few exceptions.
Most evictions occur as a result of unpaid rents. Landlords may report these debts to a collection agency that appears on your credit report, impacting your credit score.
If you’re looking to rent a new apartment, your new landlord may check both your tenant and personal credit reports. Your landlord can report unpaid debts to collections, which will affect your credit score.
How Long Do Evictions Stay on Credit Report?
Collections stemming from an eviction remain on your credit report for seven years which impacts your credit score throughout that duration.
This is a potential red flag to potential landlords who might request your credit information from the tenant-screening agency. Also, court judgments related to evictions may not appear on your credit information but appear on public records. Potential landlords keen on background checks can search court records or leave them to tenant screening agencies to review them themselves.
How Many Points Does an Eviction Drop Your Credit Score?
As earlier stated, evictions cannot be directly reported in your credit report. What gets reported is the collection for the unpaid debt. Now, this can potentially lower your credit score up to 60-100 points.
However, this is subject to the nature of your credit history. For instance, if you’ve got good credit, your credit score may drop by 80-100 points or more if eviction. Someone with a low credit score may experience a nosedive of up to 40-60 points.
How to See if an Eviction Is on Your Credit?
Knowing how evictions can potentially impact your credit score, checking your credit for these developments is essential.
One of the ways to go about it is to look up your court records, particularly if you’ve had a court case regarding rent-related issues. You can check with your resident state court records for such information as it is public.
You can also ask a potential landlord for the name of the collection agency they use. After which, you can call to find out whether an eviction is showing up on your credit information.
More so, you can request a free copy of your RentBureau report from any of the three credit reporting bureaus.
How to Get an Eviction off Your Credit Report
If spotted, there are several ways to get an eviction off your credit report. They include:
Contact an attorney if wrongfully added to your public record.
If you feel your landlord or property manager didn’t follow the due eviction process or you didn’t violate the terms of the lease, contact an attorney to determine your legal rights based on the state you reside in.
In some cases, if your income is below a certain threshold, a legal aid organization in your area might help you with your case.
Settle your unpaid debts
If you’re unable to pay the total amount, you can try to negotiate a payment plan for less than the original amount owed.
Ask for the eviction to be removed from your Tenant-Screening Reports
You can also ask your landlord or property manager to remove the eviction record as a condition of total payment. It should be a written statement for both parties to sign.
Ask for collections to be removed from your credit information
In some cases, the collection activity may still appear in your credit report even after rental debts have been paid. After making full payments on debts (or negotiating a settlement), you may be able to negotiate a “Letter of Deletion” from the collection agency to request the removal of the collection from your report. Also, get the agreement in writing.
Remove inaccuracies with the credit bureaus/tenant-screening companies
If incorrect collection is evident in your credit report, you should file a 609 Dispute Letter to the credit bureaus. You can also reach out to tenant-screening companies to clear the dispute and remove the errors.
You’d have to provide substantial proof that the information on your credit report is indeed incorrect. It may include the written agreement with your property manager or tenant-screening company.
Practicing responsible financial habits is essential in maintaining your credit score. The technicalities in getting your credit report on track may be too exhausting for you to handle. The Phenix Group offers free credit analysis and consultations, including strategies to maintain good credit.
Reach out to us today.