Can an Eviction Hurt Your Credit Scores?

Prospective landlords often ask that you include contact information for previous landlords on your rental application. If you were evicted from your last apartment or rental home, this probably isn’t information you’re eager to share. In certain circumstances, however, evidence of the eviction will appear on your credit report in the form of a collection account or legal judgment. Both collection accounts and judgments are devastating to your credit scores and may make qualifying for rental housing more difficult in the near future.

Evictions and Consumer Credit Reports

Most evictions take place relatively peacefully. The landlord notifies the tenant that he has to leave within a certain time frame, and the tenant does so. The landlord then uses the tenant’s security deposit to cover any unpaid fees or damages, and both parties move on. In some cases, the tenant’s security deposit isn’t enough to cover unpaid rent or damages. If this happens to you, you can avert future credit problems by paying the additional charges in full as soon as possible.

If you leave the debt unpaid, however, you may find yourself facing both credit trouble and legal trouble. Your former landlord has the right to sue you after the eviction. Should the landlord win this lawsuit, a judgment for the unpaid debt appears on your credit report. Judgments are inherently negative and can haunt your credit report for a decade or more, depending on your state’s judgment enforcement laws.

Landlords Send Accounts to Collections

If your landlord doesn’t want to devote time and energy to a lawsuit, he has yet another credit-killing option at his disposal: selling your debt to a collection agency. Collection agencies report delinquent accounts to the credit bureaus which then add the debt to your credit reports. Although the damage may vary, you can expect your credit scores to drop roughly 100 points or more after a collection account appears on your credit reports.

Collection accounts are particularly dangerous because collectors also have the option to sue you. If the company chooses this route, you may find yourself facing both a collection account and a judgment on your credit reports–devastating your credit rating with all three bureaus. This makes you a much higher risk for future landlords who almost always conduct a credit check before approving your rental application.

Landlords Use Tenant Screening Services

While collection accounts and judgments due to post-eviction charges can do considerable damage to your credit scores, it isn’t always possible for a prospective landlord to determine that the debt behind these events was unpaid rental debt. If your prospective landlord uses a tenant screening service to verify your reliability, however, it’s likely to turn up evidence of your prior eviction.

Not all landlords pull and scrutinize all three of your credit reports. In some cases, landlords are only interested in pulling your credit scores rather than the reports themselves. Although paying off collection accounts and judgments doesn’t make them disappear from your credit history, paid debts look better to prospective landlords than unpaid ones. Responsible debt management in general will raise your credit scores over time–making it much easier for you to qualify for the apartment or rental home that you want.

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