Whether you’ve lost a source of income or had a medical emergency, facing an eviction is something nobody wants to deal with. If you are in the middle of an eviction or are worried about getting evicted, there are a few things you should know.
We’ve broken down how eviction affects your credit score and report to keep you as informed as possible.
How Do You Get Evicted?
Typically, the laws on eviction depend on your state of residency. However, there are 4 common types of eviction:
Pay or Leave
If you fail to pay your rent, your property manager will issue a “pay or leave” notice.
You will have anywhere from 3 days to a week to either leave the home or to make a minimum payment.
Breaking the lease
This type of eviction results from breaking a lease rule, such as too many people inside the dwelling.
Destruction of Property
If you do not keep the property in a clean manner or are excessively messy the landlord can evict you. This includes any unauthorized modifications to your property.
The landlord owns the property and can do with it as they please. If the landlord gives you a 20-day notice, you must leave the property.
Do Evictions Hurt Your Credit?
Evictions do not get reported to any of the 3 major credit bureaus. However, the consequences of an eviction can affect your score in two ways:
- If you failed to pay your rent, your landlord may have sent your debts to a collection agency.
- If your landlord sues you for unpaid rent and wins, the amount you owe will be listed in your credit report as a debt owed on a judgment.
So eviction does not directly affect your credit score, but the results of the eviction can.
Credit repair companies are able to contact your creditors and lenders on your behalf in an attempt to remove as many negative entries as possible from your credit report.
Unless the negative entry is incorrect, the 3 major credit bureaus are not obligated to remove it. Credit bureaus and creditors are required to prove that you owe a certain debt if you ask them to, this is known as debt validation.
Sadly, an eviction will have the greatest impact on your future housing prospects. Landlords do not like to rent to consumers who have had a previous eviction.
These days, most property managers will perform a credit check on any and all applicants, so its best to be ready.
Many landlords will also ask you for previous referrals from other landlords in the past. The landlord could decide to not rent to you if your previous property manager has less than helpful comments about you.
The eviction process is stressful and challenging. However, by preparing for the worst, you can avoid the biggest consequences of an eviction. Obviously, you should avoid being evicted as much as possible. An eviction could haunt your life for many years to come and will affect your financial mobility in the future.