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Reader question: I am having a dispute with my landlord and withholding rent because of it. Will that affect my credit score?
Answer: Well, first, you should always pay your rent on time, even if you are having a disagreement with your landlord. If you don’t pay your rent, they can evict you, which can make it much more difficult to rent an apartment later. Furthermore, it’s not uncommon to see negative impacts from landlords reporting to credit bureaus. As such, it’s better to pay the rent and use a lawyer to settle the dispute. If you can’t afford a lawyer, contact your city’s housing branch. They usually have advocates that can help in these situations. Just never stop paying your rent, as it can do more harm than good.
To answer your question, landlords can affect your credit reports and scores in certain situations. So how does a landlord report to credit bureaus? Here are the different ways they can impact your reports and scores:
If you have a lease with your landlord and decide you want to get out of it early, you are still responsible to pay for the rest of your lease, unless you both come to an agreement. Make sure said agreement is in writing, so they don’t try to sue you later for the rest of the money. If they do sue you, the judgment can end up on your credit report.
When you move out, your landlord has the right to charge you for any damages that they feel you caused to the rental property.. If you owe them money for the damage and you don’t pay in the stipulated amount of time, they can send your account to a collection agency, which can report your debt to the credit bureaus.
The same thing applies if you don’t pay your rent. If you can’t pay your rent and get behind, your landlord can report you to a collection agency, which will end up on your credit report. When a collection agency reports to the credit bureaus, it goes onto your report as a delinquency, which hurts you more than late payments or other minor infractions.
An eviction is another way that a landlord can affect your credit score. If you are served an eviction notice, don’t worry, you aren’t in trouble yet. If your landlord takes you to small claims court or civil court over the eviction and the judge rules in their favor, then that judgment will end up on your report, which can severely damage your credit.
Remember that any derogatory records on your credit report stay on your report for seven years, which is a long time to wait for it to disappear. Make sure you are avoiding any derogatory records on your report, or you could be digging out of the hole for years. If you want to check your credit scores to make sure they are in good standing, get a free score. If you need help raising your score, check one of the many credit repair services to see if they can help.