How Does an Eviction Affect Your Credit Score?

An eviction can have significant and lasting implications for an individual’s financial standing. Understanding how an eviction might influence credit is important for navigating future financial decisions. This article explains the mechanisms through which eviction-related information becomes visible, its impact on credit, and how these records are managed over time.

How Eviction Information Reaches Your Credit File

Eviction information does not typically appear directly on a standard consumer credit report. Instead, an eviction can affect a credit file through associated financial obligations, such as unpaid rent or property damages. If a landlord attempts to recover these outstanding debts and is unsuccessful, they may sell the debt to a third-party collection agency. Once the debt is with a collection agency, that agency can then report the collection account to the major credit bureaus, including Experian, Equifax, and TransUnion. This reported collection account then becomes a negative entry on an individual’s credit report.

Furthermore, eviction proceedings are civil court matters, and the resulting judgments become part of the public record. While traditional credit reports generally no longer include civil judgments as of 2017-2018, these public records remain accessible through other channels. Landlords frequently utilize specialized tenant screening services to evaluate prospective renters. These services access public records, including eviction filings and judgments, and can also incorporate information from credit bureaus and other databases to create a comprehensive rental history report. Therefore, even if the eviction itself is not on a credit report, it can still be discovered by future landlords through these specialized screening processes.

Impact on Your Credit Report and Score

A credit report serves as a detailed record of an individual’s credit activities, including borrowing and repayment history. A credit score, on the other hand, is a numerical summary derived from the information in the credit report, providing a quick assessment of creditworthiness. Negative entries related to an eviction, primarily collection accounts for unpaid rent or damages, can significantly lower a credit score. Payment history is a major factor in credit scoring models, such as the FICO Score, often accounting for approximately 35% of the score.

When an unpaid debt from an eviction goes to collections, it marks a severe negative event on the payment history, which can cause a substantial drop in the credit score. The presence of collection accounts also impacts the “amounts owed” category if the debt remains unpaid, further contributing to a lower score. A reduced credit score can make it considerably more challenging to obtain new credit, such as loans for a car or home, or even secure credit cards, as lenders view the individual as a higher risk.

Beyond traditional credit, a lower score and the presence of eviction records in tenant screening reports can create significant obstacles for securing future rental housing. Many landlords conduct thorough background checks that include credit checks and tenant screening reports. A history of eviction or unpaid rent indicates potential financial instability or a breach of lease agreements, making prospective landlords hesitant to approve new applications. This can limit housing options to properties with less stringent screening processes or require additional financial assurances, such as a larger security deposit or a co-signer.

Distinguishing Eviction Records from Related Debts

It is important to differentiate between an eviction judgment and the financial debts that may arise from an eviction. An eviction judgment is a legal ruling by a court, granting the landlord the right to regain possession of the property. This judgment is a matter of public record, meaning it is legally accessible to anyone, including tenant screening companies. However, as of recent changes, civil judgments, including those from eviction cases, are generally no longer reported on consumer credit reports by the major credit bureaus.

Conversely, financial debts associated with an eviction, such as unpaid rent, late fees, or costs for property damage, are distinct from the judgment itself. If these financial obligations are not met, the landlord may send the debt to a collection agency. When a collection agency reports this unpaid debt to credit bureaus, it appears on the credit report as a collection account. Both the public record of an eviction judgment and the presence of a collection account for related debt can negatively influence an individual’s ability to secure future housing and credit. These two types of entries stem from different aspects of the eviction process and are reported through different mechanisms, yet both carry negative implications.

Duration and Accuracy of Eviction Records

Information related to an eviction, whether it is a collection account for unpaid rent or a record in a tenant screening database, generally remains visible for a significant period. Collection accounts and other negative entries on a credit report, such as those stemming from unpaid eviction-related debts, typically stay on the report for up to seven years from the date of the delinquency or the date the account was placed for collection. Similarly, eviction records maintained by tenant screening companies can also remain on file for up to seven years.

It is important to recognize that if the reported information is accurate and valid, it cannot simply be removed from credit reports or tenant screening records before the designated time frame expires. However, consumers have the right to dispute any information they believe is inaccurate or incomplete on their credit reports. If an individual finds an erroneous eviction record or related debt entry, they can initiate a dispute with the credit bureau or tenant screening company that reported it. Providing evidence to support the claim of inaccuracy is essential for a successful dispute process.