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Does an eviction go on your credit report?

does eviction go on your credit report

You may wonder if an eviction will go on your credit report. The good news is that an eviction does not go on your credit report. However, if further action is taken by your landlord, this can impact your finances and your credit score. 

Eviction can happen to anyone, and rising inflation rates, coupled with skyrocketing rent prices and stagnant wages, are making it more common. In fact, landlords file around 3.6 million eviction cases every year.1 

Keep reading to learn more about the eviction process and how eviction can affect your personal finance

The Basics of The Eviction Process

Eviction will work differently depending on where you live as each state has different laws. However, the general process is similar. Here are the steps of the legal process for an eviction: 

The Eviction Notice

If you break your rental agreement, your landlord will have the right to start the legal process of getting their money and/or removing you from their property. They will start with a pay or quit notice, also called an eviction notice. Once this is sent, you will have a limited amount of days to comply.

Court Summons

If you do not repay your landlord in the given amount of time, then they will start the eviction process with the courts. After this, you will be summoned for your eviction judgment. 

The Civil Judgment

The eviction judgment will settle everything from funds owed to the next required steps. If you cannot pay your owed rent immediately, you may get some time or a repayment plan with the courts. 

Vacating

The last step of the eviction is going to be vacating the property. Keep in mind that landlords are not allowed to threaten you or intimidate you throughout any part of this process, including when you are leaving. 

How Can Eviction Affect Your Credit?

If you do not pay your debt, your landlord can turn to a debt collection agency, and your credit will be impacted. Your credit can also be hurt if you take out loans and end up missing payments or defaulting. 

A Debt Collection Agency and Its Impact 

A landlord can turn to a debt collection agency/debt collector if you owe them money. This will mean that your credit reports with all major credit reporting bureaus will show an account in collections. You can check these unpaid debts by going online to get your free credit report from each credit bureau, which will also have your free credit score.

A collection account will significantly hurt your score and stay on your credit report for up to seven years! Bad credit can negatively affect your finances and many aspects of your life. 

What Happens if I Take Out Loans for Rent Payments and Then Cannot Pay Them Back?

Many people struggling to pay rent may look for rent assistance loans. There are all kinds of loan options available, such as: 

Suppose you took out these loans to catch up on your rent payments. That debt will show up on your credit report, and adding any amount of debt can hurt your score. Additionally, suppose you cannot repay or miss any payments. In that case, it can significantly damage your credit scores from all three credit reporting agencies. 

Where Will an Eviction Be Recorded?

Although an eviction will not show up on your credit report or be part of your credit history, there will still be a record of it. If future landlords decide to use a tenant screening company or conduct a background check, they will see your eviction record. Not to mention evictions are public record which means anyone can find them if they search for them.

Another way a prospective landlord can find a past eviction report is when they contact a former landlord, usually done as part of the references section with a rental application. 

How To Avoid Eviction

Eviction can be a huge mess, and if you aren’t there yet, there may be things you can do to work things out with your landlord and get things on track with your lease agreement. Here are some things to consider: 

Communicate With Your Landlord/Rental Company

If you have trouble paying rent for the first time or even a second or third time, talking to your landlord will be the best way to proceed. The fact is that an eviction case comes with court costs that your landlord will have to cover, and it can cost around $3,000. 

Let your landlord know immediately when you are having trouble paying rent. In most cases, they may be able to work with you on a payment plan for unpaid debt. 

Downsize if You Know You Cannot Pay Rent

If you barely make enough money to pay rent, any unexpected monthly expense can mean not having enough money to pay your landlord. Which can lead to eviction. Downsizing, if possible, is an excellent way to live within your means. 

See if You Qualify for Eviction Prevention Programs (EPP)

There are several government programs in every state that can help moderate to low-income households avoid eviction through assistance programs. Find out more about these programs in your state to see if you qualify for funding. 

Borrow Funds

Borrowing money through emergency eviction loans is another way to avoid eviction. Keep in mind that this works best if you are facing a short-term emergency and need it for one-time rent payment. The last thing you want to do is get stuck in a cycle of playing catch up with loans, rent, bills, etc. 

Understand the Fees Before Renting 

And finally, before renting a place, it is crucial to understand the various expenses that come with renting. 

Fee TypeTypical Cost RangeDescription
Application Fee$25 – $100Fee covering the cost of processing a new tenant’s application and background check.
Security DepositOne month’s rentA refundable deposit to cover potential damage to the rental unit or unpaid rent.
First Month’s RentOne month’s rentTypically required upfront before moving in.
Last Month’s RentOne month’s rentSometimes required upfront to ensure coverage of the tenant’s last month in the property.
Pet Fee (Non-refundable)$100 – $500One-time fee for tenants with pets.
Pet Rent (Monthly)$10 – $50 per monthAdditional monthly rent for tenants with pets.
Late Rent Fee$20 – $100 or 5% rentFee incurred for rent payments made after the due date.
Maintenance FeeVariesSome properties might charge for certain maintenance services, especially in communal living.
Utilities$100 – $300 per monthCost of utilities if not included in the rent (like electricity, gas, water, internet, etc.).
Parking Fee$25 – $200 per monthMonthly fee if the property charges separately for parking space.
Renters Insurance$15 – $30 per monthInsurance covering the tenant’s personal property and liability, sometimes required by the landlord.
*These are general estimates and the actual costs can vary. It’s always a good idea to ask for a detailed breakdown of all fees before signing a lease. 

FAQs About Eviction 

Does a paid eviction notice still affect my credit report?

Great question! If your eviction led to a debt that you’ve since paid off, it’s known as a ‘paid collection account.’ While it’s always better to have paid collection accounts rather than unpaid ones, any collection account can still impact your credit scores for some time. However, the effect tends to diminish over time, especially if you’re maintaining good credit habits moving forward!

How long does an eviction stay on my credit report if it does get reported?

Understandably, this is a common concern. Eviction records themselves don’t appear on your credit report, but related collection accounts can. These accounts typically remain on your report for up to seven years. The good news is their impact on your credit scores usually lessens as the years pass!

Can I remove an eviction from my credit report?

While the eviction itself doesn’t show on your credit report, the collection accounts might. If these are accurate, they can’t be removed until they naturally expire after seven years. However, if you find any inaccuracies in the reported details, you absolutely have the right to dispute them with the credit bureaus. They are required to investigate and correct any errors.

Do tenant screening services always find eviction records?

Tenant screening services can be thorough, and they often check for eviction records specifically. These services might not always find every eviction, especially if it didn’t lead to a collection account or a court judgment. However, most do a comprehensive search, so it’s best to be upfront about your rental history with potential landlords.

Can I rent a new place with an eviction on my record?

Having an eviction can make renting more challenging, but it’s not impossible! Honesty is key here. Be upfront with potential landlords, and offer explanations and proof of steady income or references. Some landlords are willing to work with tenants who have past evictions but demonstrate reliability and good faith.

Does the reason for my eviction affect my credit score differently?

Interesting question! The reason behind your eviction doesn’t directly impact your credit score. Whether it’s for unpaid rent or violating lease terms, what matters more is if the eviction led to collection accounts or court judgments. These are what can influence your credit score.

Key Takeaways From CreditNinja 

Eviction itself will not appear on your credit reports from all three credit bureaus. However, your credit score can be affected if your landlord works with a debt collector. The best way to protect yourself from eviction and a lower credit score is to talk to your landlord and come up with a financial plan

A CreditNinja personal loan could help you get enough emergency cash to avoid eviction! Best of all, a perfect credit score is not required for approval! Apply online today to see if you qualify. 

References:

  1. Eviction filings are 50% higher than they were pre-pandemic │ AP News
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