Several controversies surround the impact of an eviction on your credit report, and we’ve compiled a comprehensive guide to help you clear any doubts.
Going through the eviction process can be the root of several financial problems.
You could be wondering why you’re told there’s an eviction report in your record after trying countless times to apply for an apartment.
Does an Eviction Go to My Credit Report
An eviction can cause a nadir of problems in your financial life.
At a glance, an eviction is a legal process through which your landlord removes you from your property.
Getting evicted shouldn’t be a surprise since the landlord should give you an eviction notice in which they document the deadline by which you must leave.
If you still occupy the property after the deadline, you may find yourself going through a court eviction process.
Moving out of the premises, however, might prevent the credit bureaus from adding the entry to your credit report as long as you pay all overdue charges.
Since landlords perform thorough credit inquiries, your financial behavior could be the fine line in your next search for residence.
The credit-scrutiny process may be mysterious if you’re occupying the property for the first time. At the same time, landlords use different strategies to check credit reports for different consumers.
Let’s take a look.
The credit-check process
A credit check is a general term that encapsulates a broad range of things.
From evaluating whether a tenant meets a landlord’s rental criteria to scrutinizing pages of account histories, property managers screen their potential clients using various ways.
As property managers, landlords have an inherent duty to go through the data and retrieve as much as they can.
Aside from checking credit scores, property managers can look for social media, bank statements, and government records to evaluate consistency.
Below are additional methods a landlord may use to check credit.
Tenant screening services
Tenant screening services are valuable tools used by landlords to check whether their tenants meet a certain threshold.
E-renter.com, for instance, tells landlords whether tenants meet a specific score range, and may include a short set of information on evictions, collections, and background information.
Landlord associations
When you rent a condominium, your records get pooled in a shared database accessed by landlords registered in that association.
Depending on the body, these checks may include a hard inquiry and cause your credit score to drop significantly.
Credit bureaus
TransUnion, Equifax, and Experian offer several credit-scrutiny services to the rental market.
While these services often require a property manager to initiate an application, they result in a soft inquiry that doesn’t impact credit scores significantly.
Experian, for instance, says applicants can deposit $14.95 to get their report online, which would be available to their landlords for up to 30 days.
The report includes personal information, address, and SSN, and it results in a soft inquiry that doesn’t affect your credit score.
At the same time, TransUnion and Equifax offer the same services as a soft inquiry to avoid damaging consumers’ scores.
Deal-breakers
Property managers don’t always look for excellent credit, but some red flags may cause an instant rejection.
According to Sherry Tetreault, a financial expert in Tennessee, they hardly approve applications from consumers with repossessions or charge offs.
Landlords are often concerned about the financial behavior of their tenants in the last two years – and most feel that someone who has maintained their line of credit within that period will make a good tenant.
To put this into perspective, good credit doesn’t guarantee approval. Additional factors, such as income, criminal activities, and evictions, also play an enormous role in the approval process.
Nonetheless, money always “talks,” so if a consumer has some detrimental elements yet they’re willing to secure an enormous upfront fee, the landlord will likely agree with them.
When can you get evicted from your property?
The causes of eviction are generally listed in the lease agreement and vary from one landlord to another.
Here are additional instances of other common causes.
Defaulting in rent
If you delay your rent payments, you’ll be required to give the notice to pay or quit.
In other words, you’re given the option to either pay your rent or leave by a preset deadline.
If you pay, the landlord will nullify the eviction notice almost immediately. Still, failing to pay yet you’re occupying the property could lead to a lawsuit.
Unlawfulness
If you damage the rental property, misbehave or use it to do illegal business, you could get evicted.
Additionally, if you perform improvements on the property that weren’t included previously in the lease agreement, you might get evicted.
Violating lease agreement
Your agreement with your landlord on the code of conduct, payments, and miscellaneous activity is covered in your lease agreement.
If you violate any of these agreements, such as playing loud music or renting the apartment without permission, you could face eviction.
No cause eviction
A landlord can evict you for no good reason.
Probably they want to sell the property, relocate, let a relative in, or renovate the premise.
Unless you’re in a rent-controlled premise, your property manager owes you no explanation as long as they don’t discriminate you.
In any case, you’ll be granted 30-60 days to vacate the premise.
How an eviction affects your credit
An eviction won’t necessarily show up on your credit report, but information related to the eviction will show up.
In some cases, the landlord uses the court to get you off the property and obtain a judgment against you, which would result in an eviction being placed on your credit report.
Experts advise that a judgment on your credit report will be assumed that you were evicted and make it hard for you to rent in the future,
At the same time, a judgment will lower your success rate in future credit card applications.
Like several other types of negative information on your credit report, an eviction can stay in your report for close to a decade.
A judgment can stay in your credit report for seven years, and paying off the judgment once you can afford to pay won’t delete it. Instead, it will increase your odds of getting a house to rent in the future.
Even if you leave the property before the eviction reached court, your credit will still be impacted.
Some landlords report to tenant screening services, so even if your credit report doesn’t show an “eviction,” a confirmation that your records are in one of these databases would be sufficient.
Renting with an eviction in your records is incredibly hard, so make sure to avoid eviction by all means. If you have financial challenges, you may reduce other expenses, talk to your landlord, or borrow money to clear the arrears.
Can I dispute an eviction?
If you’ve reached out to the landlord who reported the eviction and they don’t have any record for any debt owed, you should contact the tenant screening company and confirm whether they have related information in their file.
Afterward, request a free copy of your credit report from the three data centers and check whether you have any eviction-related debt on your report. Look for inaccurate entries and dispute them.
What options do I have?
The first step is to avoid the legal eviction process at all costs since it can be financially excruciating.
You can do anything possible from borrowing money, paying rent, or moving out voluntarily to avoid the legal process.
Work something
Your property manager is in business, and they probably have additional expenses that need constant liquidity.
It’s far easy for both of you if you commit to a payment plan to help you get right back on track.
Rather than involving lawyers through the legal process, it’s far cheaper to have a handshake agreement.
Ensure that you put everything in writing to be more thorough, which would make everyone happy.
Look for another apartment
If you don’t find an amicable agreement, move out and look for another premise.
The eviction process is long, expensive, and there isn’t a doubt no party wants it anyway.
Moving out will not only save you the legal hassle but also cut the landlord’s losses, which looks like a viable option for him.
Conclusion
On a concluding note, the best strategy is to fix your credit to avoid any problems with your lease.
You can retrieve your credit report from the three bureaus every year. That usually includes the information your landlord will see in your report.
Without a doubt, you can’t control a landlord’s interpretation of the items in your credit report. However, knowing that it’s in good standing is better than waiting for the worst.
At the same time, a good credit report will give you a better chance of applying for credit, getting favorable interest rates, and credit cards.
Overall, keeping your credit utilization ratio below 33%, maintaining your debt levels within a favorable threshold will help.
