Does Getting Evicted Hurt Your Credit?

An eviction, which is the legal removal of a tenant from a rental property, can have significant financial consequences. While the eviction itself may not directly appear on a credit report, the circumstances surrounding it, particularly unpaid debts, often lead to negative entries that can harm one’s credit standing. Understanding how these events affect financial records is important.

How Eviction Records Appear on Your Credit Report

An eviction proceeding is a legal action that becomes a public record. While the eviction notice or court-ordered removal does not typically show up directly on credit reports from Experian, TransUnion, and Equifax, related financial issues can. For example, if a landlord pursues a tenant for unpaid rent or damages, any civil judgments issued by a court against the tenant can be public records. Historically, these civil judgments appeared on credit reports, though this practice changed in 2017 for most civil judgments.

Despite this change, the underlying debt often remains a concern. Landlords frequently send unpaid balances, such as delinquent rent or fees, to collection agencies. When a debt goes to collections, it is reported to the credit bureaus as a collection account. These collection accounts indicate a defaulted debt and can appear on a credit report. This means that while “eviction” might not be listed, financial repercussions like collection accounts for unpaid rent or judgments for money owed will be.

Beyond credit reports, landlords widely use tenant screening services to evaluate prospective renters. These services often access public records, including eviction filings and court outcomes, and compile information from various databases. Therefore, even if a credit report does not explicitly show an eviction, a tenant screening report used by future landlords likely will.

Impact on Your Credit Score

The presence of collection accounts and civil judgments on a credit report can significantly harm an individual’s credit score. Credit scoring models, such as FICO and VantageScore, consider payment history a primary factor in calculating scores, accounting for about 35% to 41% of the score. Unpaid debts sent to collections or civil judgments indicate a higher credit risk to lenders.

These negative entries can cause a substantial drop in credit scores, potentially by 100 points or more, depending on the individual’s starting score and the severity of the negative marks. The impact can vary based on whether the item is an unpaid judgment, a paid judgment, or a collection account. While some newer scoring models, like VantageScore 3.0 and 4.0, and FICO 9 and 10, may disregard paid collections, older models, including the widely used FICO 8, may still penalize them.

The most severe impact on a credit score typically occurs when the collection account or judgment is first reported. An unpaid collection account is viewed more negatively than a paid one, though both can remain on the report for an extended period. Even smaller collection amounts, such as those under $100 or $250, may be disregarded by some newer FICO and VantageScore models, but larger amounts will affect the score.

Eviction’s Long-Term Presence on Credit Reports

Negative information related to an eviction, specifically collection accounts for unpaid rent and civil judgments, can remain on credit reports for a significant duration. Most negative items, including collection accounts, typically stay on credit reports for up to seven years from the date of the original delinquency. This seven-year period begins from the date the payment was first missed, not when the account was sent to collections.

Even if the debt associated with the eviction is paid or settled, the record of the collection account or judgment will remain visible on the credit report for the full seven-year period. While the impact on the credit score may lessen over time as the negative item ages, the presence of the record itself persists. Public records of evictions can also linger on tenant screening reports for up to seven years.

Broader Financial Implications of Eviction

Beyond the direct impact on credit scores, an eviction can create wider financial challenges. One of the most immediate implications is the difficulty in securing future housing. Landlords frequently use tenant screening reports that reveal eviction histories, making it challenging to find new rental properties. This can lead to increased scrutiny from landlords, potential denial of rental applications, or requirements for higher security deposits.

An eviction record can also impact employment opportunities, particularly for certain job roles that involve financial responsibility. Background checks conducted by employers might uncover financial judgments or collection accounts, which could be a factor in their hiring decisions. A poor credit history resulting from an eviction can also affect other financial aspects. For example, individuals with a low credit score might face higher insurance rates or be denied favorable terms on loans, including mortgages. Securing a mortgage after an eviction can become more challenging, often requiring a rebuild of credit and potentially leading to less favorable loan terms like higher interest rates or larger down payments.