Does an Eviction Hurt Your Credit Score?

An eviction is a legal action initiated by a landlord to remove a tenant from a rental property, typically due to a breach of the lease agreement, most commonly non-payment of rent. A credit score is a numerical representation of an individual’s creditworthiness, used by lenders and other entities to assess the risk of lending money or extending credit. While an eviction itself is not directly reported to credit bureaus, the financial consequences often associated with an eviction can significantly harm an individual’s credit score. The indirect reporting mechanisms of these financial consequences are what ultimately lead to a negative impact on credit.

How Eviction Information Reaches Credit Reports

Landlords do not report rental payment history, including evictions, directly to the three major consumer credit bureaus: Equifax, Experian, and TransUnion. The negative credit impact stemming from an eviction primarily arises from related financial actions that do get reported. This indirect reporting occurs through two main pathways that capture the financial obligations associated with an eviction.

One pathway involves court judgments. If an eviction case proceeds through the legal system and results in a civil judgment against the tenant for unpaid rent or property damages, this judgment becomes part of the public record. Credit bureaus regularly gather information from public records, and such a judgment can then appear on an individual’s credit report. This public record indicates a legal finding of financial obligation that was not met, signifying a credit risk.

Landlords choose to sell or assign delinquent rent accounts to third-party debt collection agencies. These agencies specialize in recovering unpaid debts. Unlike landlords, collection agencies routinely report unpaid debts, including those originating from rental agreements, to the major consumer credit bureaus. When a collection agency reports a debt, it creates a negative entry on the individual’s credit report, signaling a failure to pay a financial obligation. This reporting by collection agencies is a primary way unpaid rental debt impacts credit scores.

Credit Score Components Impacted by Eviction

Credit scoring models, such as the widely used FICO Score and VantageScore, utilize various factors to calculate an individual’s creditworthiness. Eviction-related financial entries can significantly impact several of these components, leading to a lower credit score.

Payment history accounts for the largest portion of a credit score, typically around 35%. A collection account for unpaid rent, reported by a collection agency, is considered a severe delinquency. It indicates a failure to meet a financial obligation and will have a substantial negative effect on an individual’s payment history, directly lowering their score.

The “amounts owed” factor makes up about 30% of a credit score. If a significant amount of unpaid rent goes to collections, it increases the total amount of debt an individual owes. While not directly “credit utilization,” a large collection balance can reflect negatively on the overall amount of debt, indicating a higher risk to potential lenders.

Length of credit history, which considers the age of accounts, is typically less directly impacted by an eviction. However, new negative marks, particularly severe ones like collection accounts, can overshadow a previously established positive credit history. A shorter credit history combined with new negative entries can amplify the overall negative impact on the score. Credit mix and new credit are also less directly affected, but a damaged credit score due to an eviction can make it more difficult to obtain new credit or build a diverse credit portfolio, as lenders perceive a higher risk.

Timeframe for Eviction Records on Credit Reports

Negative information related to an eviction, whether a court judgment or a collection account, remains on a credit report for a specific duration. This timeframe is governed by federal regulations, such as the Fair Credit Reporting Act (FCRA).

If an eviction resulted in a civil judgment against the tenant for unpaid rent or damages, this public record stays on a credit report for seven years. This seven-year period begins from the date the judgment was filed, irrespective of whether the judgment is eventually paid or satisfied.

Unpaid rent that has been turned over to a collection agency and subsequently reported to credit bureaus remains on a credit report for about seven years. This seven-year period begins from the date of the original delinquency, which is the date the first payment was missed with the original landlord, not the date the collection agency acquired the debt. These timeframes are consistent with how most other negative credit information, such as late payments or bankruptcies, are reported.