Do Evictions Hurt Your Credit Score?
Understand the complex ways an eviction can affect your credit score and financial standing, and learn how to navigate its impact.
An eviction is a legal process where a landlord removes a tenant from a rental property, typically due to a lease violation. This article details how evictions can influence various personal records and an individual’s creditworthiness, clarifying how eviction-related information may appear on different types of reports.
How Evictions Appear on Your Records
An eviction filing does not typically appear directly on a standard credit report from major bureaus like Equifax, Experian, or TransUnion. The eviction event itself is usually a matter of public record, accessible through court databases. However, this initial court filing does not automatically populate credit reports.
A civil judgment, which results from a court order in a non-criminal case, can arise from an eviction lawsuit if a tenant is found liable for unpaid rent or damages. Historically, these judgments were often reported to credit bureaus and appeared in the public records section of a credit report. While credit bureaus generally stopped including most civil judgments on credit reports as of 2017, they remain public records accessible through searches.
Credit Score Impact from Eviction-Related Debts
While the eviction action itself may not directly appear on a credit report, the financial obligations arising from it can significantly impact credit scores. Unpaid rent, late fees, or property damages owed to a landlord can be sent to collection agencies. When a debt goes to collections, it is reported to credit bureaus and appears as a collection account on a consumer’s credit report. These collection accounts can substantially lower credit scores and typically remain on credit reports for seven years from the date of the original delinquency.
If a landlord obtains a civil judgment against a tenant for unpaid debts, this judgment can also affect credit, even if not directly listed on credit reports by major bureaus. The underlying unpaid debt that led to the judgment will likely already be reflected as late payments or collection accounts, which negatively impact credit scores. Such a judgment indicates financial insecurity and may make it challenging to secure new loans or credit cards, often leading to less favorable terms or higher interest rates.
Credit scoring models, such as FICO and VantageScore, weigh collection accounts differently. While older FICO models might still penalize paid collection accounts, newer models like FICO 9 and VantageScore 3.0 and 4.0 may ignore paid collections or reduce their negative impact. Payment history is a primary factor in both FICO and VantageScore calculations, accounting for a significant portion of the score. Thus, any missed payments or collection accounts stemming from an eviction can have a lasting detrimental effect on a credit score.
Understanding Tenant Screening Reports
Tenant screening reports are distinct from traditional credit reports and serve a different purpose for landlords. These reports provide landlords with a comprehensive overview of a prospective tenant’s background, helping them assess reliability and suitability for a rental property. They typically include details such as credit history, eviction history, and criminal records.
Landlords frequently use these reports to make informed decisions about rental applications. Unlike credit reports, tenant screening reports are very likely to show eviction filings, even if they did not result in a judgment or unpaid debt. An eviction record on a tenant screening report can significantly affect future rental applications, as landlords may view it as an indication of past rental issues.
Addressing Eviction-Related Credit Report Entries
Individuals should regularly check their credit reports from the three major credit bureaus—Equifax, Experian, and TransUnion—for accuracy. A free copy of each report is available annually through AnnualCreditReport.com. Reviewing these reports helps identify any eviction-related debts, such as collection accounts or civil judgments, that may be listed.
If inaccurate or outdated information is found, it can be disputed with the credit bureaus directly. The dispute process typically involves submitting a written explanation of the error along with supporting documents. Credit bureaus are required to investigate disputes within a certain timeframe, usually 30 days. Most negative items, including collection accounts, remain on a credit report for approximately seven years from the date of the original delinquency. While a paid collection account still remains on the report for this period, its impact on credit scores may lessen over time, particularly with newer scoring models.