Can an Eviction Hurt Your Credit Score?
Understand if and how an eviction impacts your credit score, detailing the financial consequences that can appear on your credit report.
An eviction can significantly impact an individual’s financial standing, extending beyond the immediate loss of housing. While an eviction, a legal process initiated by a landlord, does not directly appear on a credit report, its financial repercussions frequently do. Understanding this indirect connection is important for maintaining financial health. This article details how evictions can affect credit and provides guidance on managing related credit report information.
How Eviction Information Appears on Credit Reports
An eviction filing is generally not reported directly to the three major credit bureaus—Equifax, Experian, and TransUnion—by the courts. However, financial obligations from an eviction can lead to negative credit report entries. This typically occurs through two primary mechanisms: unpaid rent or damages sent to collection agencies, and court judgments.
When a tenant vacates a property with outstanding rent or unrepaired damages, the landlord may pursue these debts. If direct collection efforts fail, the landlord can sell the debt to a third-party collection agency. These agencies report the delinquent account to credit bureaus, where it appears as a collection account. Such entries can remain on a credit report for up to seven years from the date of the original delinquency.
A landlord may also pursue a money judgment in court for unpaid rent, fees, or damages. While civil judgments were previously reported on credit reports, major credit bureaus stopped including most civil judgments. However, these judgments remain public records, accessible through other channels. Even if the judgment itself does not appear on a credit report, the underlying debt, if sent to collections, will likely be reported.
Beyond credit reports, specialized tenant screening reports are widely used by landlords to assess prospective tenants. These reports often include eviction history, even if the eviction case was won by the tenant, and may also list associated court judgments. While your credit report might not explicitly state “eviction,” future landlords will likely see your rental history, including prior evictions, through these dedicated screening services.
Understanding the Credit Score Impact
When eviction-related financial liabilities appear on a credit report, they can significantly impact an individual’s credit score. Collection accounts are serious derogatory marks, indicating a failure to pay a debt as agreed. Payment history is a major component of credit scoring models, accounting for approximately 35% of FICO Scores and up to 41% of VantageScore models.
The presence of a collection account can cause a substantial credit score drop, potentially by 50 to 100 points or more, particularly for individuals with good credit. The severity of the score reduction depends on factors such as the amount owed, the recency of the collection, and the individual’s overall credit profile. Multiple collection accounts or judgments, if reported, would compound this negative effect, indicating a pattern of financial difficulty.
While paid collection accounts may have a lesser impact than unpaid ones, they typically remain on the credit report for the full seven-year period. Newer credit scoring models, such as FICO Score 9 and VantageScore 3.0 and 4.0, may disregard paid collection accounts or treat medical collections less harshly, but older versions used by lenders may still penalize them. Even if a debt is settled, its initial appearance as a collection can still have a lasting effect on creditworthiness.
Managing Your Credit Report Information
Taking proactive steps to manage information on your credit report after an eviction can help mitigate negative impacts. Regularly check your credit reports for accuracy. Consumers are entitled to a free copy every 12 months from each of the three major credit bureaus—Equifax, Experian, and TransUnion—through AnnualCreditReport.com. Obtain these reports and carefully review them for any collection accounts or judgments related to the eviction.
If you identify inaccurate or incomplete information, you have the right to dispute it with both the credit bureau and the entity that reported it. The dispute process typically involves submitting a written explanation of the error along with supporting documentation. Credit bureaus have 30 days to investigate a dispute and must report the results within five business days of completing their investigation.
Understand the reporting timelines for negative information. Collection accounts and most other derogatory marks can remain on a credit report for up to seven years from the date of the original delinquency. While a paid collection or judgment may show as satisfied, it will still appear on the report for this duration. The negative impact on your credit score tends to diminish over time as the information ages.
Beyond addressing specific inaccuracies, rebuilding credit involves consistent positive financial behaviors. This includes making all other payments on time, keeping credit utilization ratios low on revolving accounts, and managing existing credit lines responsibly. Paying down other debts can improve your overall credit profile over time, even with a past collection or judgment on your report. These diligent financial practices demonstrate a commitment to responsible credit management and can gradually improve your credit score.