Does an Eviction Fall Off Your Credit Report?
Understand how an eviction can affect your credit history and what steps you can take to manage its impact on your financial future.
An eviction is a legal process initiated by a landlord to remove a tenant from a rented property, typically due to a lease violation like non-payment of rent. While the direct court filing of an eviction does not appear on a credit report, its financial repercussions often do, impacting future housing and financial standing.
How Evictions Appear on Credit Reports
The eviction proceeding itself does not show up directly on a standard consumer credit report. Credit reports track financial obligations and payment behaviors, not civil court actions. However, the financial obligations accompanying an eviction can affect a credit report indirectly.
An eviction impacts credit if the landlord obtains a monetary judgment against the tenant for unpaid rent, damages, or legal fees. While major credit bureaus largely stopped including civil judgments on credit reports in 2017 and 2018, these judgments are public records accessible through other channels. The debt itself can still be reported.
Another scenario involves the landlord selling unpaid debt to a third-party collection agency. The collection account will then appear on the credit report, indicating the debt was not paid to the original creditor.
It is important to differentiate credit reports from tenant screening reports. Specialized tenant screening reports access and display eviction court records directly, providing a comprehensive rental history to prospective landlords. These reports are distinct from credit reports generated by Equifax, Experian, and TransUnion, which focus on financial creditworthiness.
Credit Reporting Timeframes for Evictions
Information related to an eviction, such as collection accounts for unpaid rent or damages, remains on a credit report for a specific duration. Under the Fair Credit Reporting Act (FCRA), most negative information, including collection accounts, can be reported for up to seven years. This timeframe is calculated from the date of the original delinquency, the first missed payment that led to the account being sent to collections.
If a tenant fails to pay rent and the debt is sold to a collection agency, that account will stay on the credit report for seven years from the initial missed payment date. Even if paid, the entry may remain for the full seven-year period, though its impact lessens. This rule applies to most adverse items, ensuring older negative information eventually falls off the report.
While civil judgments historically remained on credit reports for seven years, their inclusion by major credit bureaus has largely ceased. The FCRA allows for reporting relevant financial history while offering consumers a chance for a fresh start after a reasonable period.
Impact of Evictions on Credit Scores
An eviction-related item, such as a collection account for unpaid rent, can significantly harm a credit score. Credit scoring models, like FICO and VantageScore, heavily weigh payment history as the most influential factor, often accounting for 35% of the score. A collection account indicates a failure to pay a financial obligation, a severe negative mark.
When a collection account appears on a credit report, it signals a higher risk to potential lenders, leading to a substantial drop in credit scores. The initial impact is typically the most severe when newly reported. Over time, as the account ages, its negative influence lessens, even before removal.
Beyond the direct impact on a credit score, an eviction’s financial consequences can indirectly affect other aspects of a credit profile. A damaged credit score can make it challenging to obtain new credit, limiting one’s credit mix or the length of new credit history. A poor credit profile can also impede efforts to secure future housing, obtain favorable interest rates, or affect certain employment opportunities.
Steps to Address an Eviction on Your Credit Report
Individuals can take several steps to manage an eviction-related entry on their credit report. First, obtain copies of credit reports from Equifax, Experian, and TransUnion. Consumers are entitled to a free report from each bureau annually through AnnualCreditReport.com.
Upon receiving the reports, review them for inaccuracies related to the eviction, such as incorrect dates, amounts, or debts reported as outstanding after payment. If errors are identified, consumers can dispute this information directly with the credit bureaus. The dispute process involves submitting a formal request, often online or by mail, detailing the inaccuracy and providing supporting documentation.
Negotiating with the landlord or collection agency is another option. While not guaranteed, it may be possible to arrange a payment plan or a “pay-for-delete” agreement, where the collection agency agrees to remove the entry upon full payment or settlement. Such agreements should always be obtained in writing before making payment.
Rebuilding credit after an eviction-related incident is a long-term process requiring consistent positive financial behavior. This includes making all other payments on time, maintaining low credit utilization, and considering credit-building tools. Secured credit cards, which require a cash deposit, or credit-builder loans can be effective strategies to restore a damaged credit profile.