Does Eviction Impact Credit? What You Need to Know

Written By Marie Abendroth
Last updated April 30, 2021

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Credit
April 30, 2021

Simple. Thrifty. Living.

If you are having a hard time keeping up with your rent payments each month, eviction notices are likely landing on your doorstep. These notices undoubtedly trigger a ton of questions and concerns beyond how you will keep your home. You might wonder what happens during an eviction, for example, and if it will affect your credit score and ability to get housing. If so, you can get answers to those questions in this guide–and hopefully avoid eviction altogether.

Eviction occurs most often due to an inability to pay rent, but that’s not the only reason.

Other legal reasons for eviction include:

· Violation of lease terms, like unauthorized pets

· Unwillingness to move out after lease expires

· Presence of illegal activity on the premises

· Damage to the rental and its surrounding property

When any of that occurs, the landlord can send you an eviction notice giving you around 30 days to move out. You can use that time to resolve the problem and come to an agreement with your landlord. If that does not work, the landlord can file their case with the eviction court to present evidence and get a ruling from the judge.

Upon winning their case, the landlord can have law enforcement help reclaim the property. You will then have to quickly grab your belongings and leave the rental in a hurry. So, it’s best to move out before that happens.

Although credit reports reflect your financial standing and creditworthiness, evictions do not impact your score or show up on the report itself. Related items could land on your credit report, however, depending on what happens during the eviction.

Debts in Collection

Any unpaid rent, utility bills, and court fees can land on your credit report if allowed to go to collections. You can avoid that by setting up a payment plan and paying down the balance on time each month.

If you are not sure how to free up funds for those payments, consider going through your budget to get rid of financial leaks. By canceling unused subscriptions and renegotiating your monthly bills, you can save up to $1,000 a year.

Monetary Judgement

A monetary judgment could complicate matters further if the court issued one. With that ruling, you must pay back the rent owed plus interest. If you do not abide by that requirement, the court may garnish your wages or withdraw money directly from your bank account.

Either way, the judgment lands on your credit report and will stay there for up to seven years. Even after paying the amount owed, the judgment and any related collections will remain on your report until they drop off naturally.

Petition the Court

You can petition the court to have the eviction record expunged after fulfilling your payment obligations. The court will consider the circumstances of the case and how the reported items impact your ability to move forward. If they agree to your request, the judgment will disappear from the court records. You will still need to dispute the items on your credit report to have them removed as well.

Even without a monetary judgment, the eviction becomes public record. It also lands on your rental history if the court rules in the landlord’s favor. So, it’s wise to try to avoid that at all costs.

You have several options to consider:

· Pay the balance due in full and keep making your rent payments on time

· Negotiate a settlement with the landlord and move out on your own accord

· Fully resolve the reason for eviction and see if the landlord will let you remain in the rental

· Talk to a tenants’ rights organization if the landlord is not following local laws

Hiring Legal Support

You can also hire a lawyer and fight your case in court. They will need to present evidence that proves you did not violate the lease terms or give just cause for the eviction. Alternatively, you can bring in evidence that shows the landlord did not follow the laws in your state.

If you win your case, you will not have to worry about questions like, “Does eviction impact credit?” It’s still a good idea to look for a different place to live if possible because your landlord could try to evict you again. Unless you have good reason to break the lease, you may need to wait until the term is up to move.

Even if you cannot stop the eviction or get it removed from your record, it is still possible to get approved for a rental home. You may find it more difficult than before, so allow additional time to weed through your options.

With each rental opportunity, you can improve your chances of getting approved by:

· Tell the landlord what led up to the eviction and honestly answer their questions

· Share what has changed with your situation and any things you may have learned

· Offer character references that show you are trustworthy and have an excellent reputation

· Be open to paying a higher security deposit to help offset the perceived risks

· Have a co-signer ready to provide financial backing if things go awry during the lease period

Income and Credit History

A solid income history and good credit score can also help in easing the landlord’s worries. As you share your story with them, they will be more willing to overlook past mistakes and give you a second chance.

If they approve your application, abide by all the lease terms and make your monthly rent payments on time and in full. Your landlord may be wary at first, so go above and beyond in helping them see you as a great tenant. You will then have a good shot at renewing your lease if you want to stay for the long term.

With these answers on your side, you are better able to navigate the eviction process and come out ahead in the end. So, take a deep breath and get ready to do what you can to avoid eviction or navigate the repercussions if you can’t.

About the Author

Marie Abendroth

Marie is a skilled content strategist and SEO copywriter with a focus on helping people improve their personal finances and overcome their barriers to success. In her articles, she aims to provide up-to-date info that can help everyone better understand how to invest in a better future.  

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