When you can’t pay your rent, or you break other promises made in your lease agreement, you run the risk of being evicted. You aren’t alone. On average, 3.6 million eviction cases are filed in the United States each year. Less than half of those (1.5 million) end in actual eviction judgments.
Aside from leaving you scrambling to find a new rental unit, an eviction can seriously damage your credit score. While an eviction doesn’t directly show up on your credit report, it can still impact your credit and affect your ability to rent in the future. So if you’re wondering “Does an eviction go on your credit report?,” we are here to help.
Here’s what to know about evictions, their impact on your credit, and what your options are if you’re facing one.
Eviction is a legal process that allows a landlord to force their tenant to vacate the property.
Financial troubles aren’t the only reason people get evicted.
A landlord can evict you for:
Eviction notice laws vary by state, but most states require the landlord to send an eviction notice alerting the tenant of the issue. Then the tenant has a short period of time before the eviction process is in full effect – typically anywhere from three days to one month – to resolve it.
If the tenant can’t catch up on your rent payment or otherwise fix the problem, the landlord files the eviction pape work in housing court. The housing court then provides a hearing date to both the landlord and tenant.
At the eviction hearing, the landlord and tenant can present their case and provide supporting documentation, including the original lease, correspondence between the landlord and tenant, etc.
If the landlord wins the case, the renter will receive a court order to move out. The deadline to move out varies by state but is usually anywhere from a couple of days to a few weeks.
So what are the consequences of an eviction on a credit report? If you’ve been evicted, it won’t be listed on your credit report. However, an eviction can still impact your credit.
If you owe the property owner back a rent payment or other fees, the landlord can turn that debt over to a collection agency. The collection agency will almost certainly report your account to the credit bureaus, which will negatively impact your credit score.
According to myFICO, having an account reported to collections has a significant negative impact on your credit score. Exactly how much of an effect it has will depend on the amount reported to collections and the other information included in your credit report.
By the time your account gets sent to a collection agency, it’s already past due. So the collection agency doesn’t have to wait a certain amount of time before reporting it to the credit bureaus.
Once there, the collection account remains on your credit report for seven years from the date of the first missed rental payment. The more recent the late payment, the greater impact it has on your credit score.
In the past, the eviction might also appear on your credit report in the form of a legal judgment. Your property owner can file a lawsuit against you for unpaid rent. If the property owner won a judgment ordering you to pay, that eviction judgment would appear on your credit report in the Public Records section.
Thanks to the National Consumer Assistance Plan, the three major credit reporting agencies (Experian, Equifax, and TransUnion) no longer include an eviction judgment as a part of a consumer’s credit history.
The only public court records collected routinely by the credit reporting bureaus are bankruptcy reports.
If a civil judgment, such as one resulting from eviction, appears on your credit report, file a dispute with the credit reporting agency to have it removed.
The easiest way to avoid eviction is to resolve the situation as soon as you receive the first notice from the property owner.
Of course, sometimes you simply can’t afford to pay the full amount of rent due, even though you’d like to stay where you are.
In that case, talk to your landlord about whether they will accept a payment arrangement. Some property owners are willing to work with tenants who need a little more time to pay, especially since evicting a tenant can be expensive.
Be sure you get any payment agreement in writing.
If the property owner doesn’t work with you, you might be able to get rent help from one of these resources:
If you live in an apartment building with a federally-backed mortgage and can’t pay your rent due to COVID-19, the CARES Act created a 120-day moratorium on evictions caused by not paying rent. Your landlord cannot charge late fees or penalties during this time.
The Act does not cancel rent, so you will still owe the money eventually.
Check with your landlord or property manager to find out whether your building’s mortgage is federally insured. You can also check out the National Low Income Housing Coalition’s searchable database and map of covered properties.
The eviction moratorium started on March 27, 2020, and expired on July 24, 2020. However, there have been discussions in Congress about extending the eviction moratorium and expanding it to cover all renters.
Many states have issued their own eviction moratoriums due to COVID-19. The National Low Income Housing Coalition maintains a list of state and local bans.
The U.S. Department of Health & Human Services provides Community Services Block Grants to community organizations that provide rental assistance and landlord intervention.
You can search for a Community Action Agency in your area at www.communityactionpartnership.com/find-a-cap/.
Housing finance agencies offer individuals and families a wide range of housing support and assistance. The National Council of State Housing Agencies maintains a list of housing finance agencies by state.
Check with your state social services agency for more information on state benefit programs that may be able to help with rent assistance and other benefits.
USA.gov allows visitors to search for social service agencies by state.
An eviction may not appear on your credit report, but that doesn’t mean potential landlords won’t find out about it.
Many landlords order tenant screening reports that provide information beyond an official credit report.
Tenant screening reports provide information on the history and habits of tenants. They may include your credit history, but they can also include details about your payment and eviction history and even a criminal background check.
Like credit reports, negative information, including evictions, remains on your tenant screening report for seven years.
The Fair Credit Reporting Act requires property owners to get written permission from the tenant or potential tenant before ordering a credit report or other tenant background check.
If you don’t want a future landlord to obtain that information, be sure you don’t sign an authorization form as part of the tenant application process.
If the property owner rejects you based on information contained in a consumer report, they’re required to notify you orally, in writing, or electronically.
This is called an Adverse Action Notice, and the FTC requires it to include:
If eviction is unavoidable, you may have a tougher time finding a new place to live. But it’s not impossible.
Here are some options to consider:
Getting evicted from a rental property will have a negative effect on your finances and your life. Whenever possible, avoid eviction at all costs.
Still, if you can’t prevent an eviction, you do have options.
Be prepared to answer questions about your eviction history with potential landlords and explain why it won’t happen again. It might take a little more preparation and persistence to find a new place to live, but if you’re honest and make a good impression, it may be enough to convince a landlord that you can be a model tenant.
Janet Berry-Johnson is a Certified Public Accountant and freelance writer with a background in accounting and insurance. Her writing has appeared in Forbes, Freshbooks, The Penny Hoarder, and several other major outlets. See Janet on LinkedIn and Twitter.