How Does Being Evicted Hurt Your Credit?

Credit scores and credit reports are central to an individual’s financial standing, influencing access to financial products and services. They show how a person manages financial obligations, reflecting creditworthiness to lenders and service providers. Strong credit is beneficial for securing loans, like mortgages or car financing, and impacts obtaining credit cards and insurance premiums. Furthermore, a favorable credit profile can influence approval for rental housing and be considered by some employers.

How Eviction Information Appears on Credit Reports

An eviction does not directly appear on a standard credit report from the three major consumer credit bureaus: Experian, Equifax, and TransUnion. However, the financial and legal events that often accompany an eviction can significantly impact an individual’s credit history. This impact primarily occurs through two distinct, yet related, channels: unpaid rent being sent to collections and the public record of eviction proceedings.

Eviction filings are public records. While these court records do not directly translate into entries on standard credit reports, they are accessible through specialized tenant screening services. Landlords frequently use these tenant screening reports, which differ from traditional credit reports, to review a prospective renter’s history, including past evictions, judgments, and rental payment patterns.

When a tenant is evicted, there is typically an outstanding financial obligation, such as unpaid rent, late fees, or property damages. Landlords often pursue these debts by sending them to collection agencies. Once a debt is placed with a collection agency, the agency will likely report this unpaid balance to the major credit bureaus. This results in a collection account appearing on the individual’s credit report, detailing the original creditor, the amount owed, and the date of delinquency. Such an entry is considered a negative mark, indicating a failure to pay a debt as agreed.

Impact on Your Credit Score

The presence of a collection account on a credit report can lead to a significant reduction in an individual’s credit score. Credit scoring models, such as FICO and VantageScore, assign weights to different aspects of a credit report. Payment history is the most influential factor, accounting for approximately 35% of a FICO Score and around 40% of a VantageScore.

An unpaid collection account directly reflects negatively on this payment history component, signaling a lapse in financial responsibility. The outstanding debt also contributes to the “amounts owed” category, which comprises about 30% of a FICO Score and a portion of a VantageScore. This increase in reported debt can indicate increased financial risk to potential lenders.

The severity of the impact from a collection account can be substantial, with a new collection potentially causing a credit score to drop by as much as 100 points. The effect tends to be more pronounced for individuals who previously maintained higher credit scores. Different credit scoring models may treat collection accounts with varying degrees of severity. For instance, newer versions like FICO Score 9 and VantageScore 3.0 and 4.0 are more forgiving of paid collection accounts, and FICO 9 specifically reduces the impact of unpaid medical collections. However, FICO Score 8, which remains widely used by many lenders, continues to consider both paid and unpaid collections as negative.

Timeframe for Eviction-Related Information

Negative information stemming from an eviction can remain on an individual’s credit report for a long time. These collection accounts remain on a credit report for up to seven years from the date of the original delinquency. This seven-year period begins from the initial missed payment that led to the debt becoming past due, rather than the date it was sent to collections.

Even if the outstanding debt is paid in full, the negative mark of the collection account remains on the credit report for the seven-year period. While the impact on the credit score may diminish over time, especially if the account is marked as “paid,” the record of the collection persists. Similarly, eviction records appearing on specialized tenant screening reports can also remain visible for up to seven years.

Reviewing Your Credit Report

Regularly reviewing your credit report is an important financial practice, allowing you to monitor your financial standing and detect any eviction-related entries. Federal law grants all consumers the right to obtain a free copy of their credit report from each of the three major credit bureaus—Experian, Equifax, and TransUnion—once every 12 months. These reports can be accessed through AnnualCreditReport.com.

When examining your credit report, focus on sections that may contain eviction-related information. Look for entries under “Collections” or “Derogatory Accounts,” as these list any debts sent to collection agencies by a former landlord. While general civil judgments are largely excluded from standard credit reports today, it is advisable to review the “Public Records” section for any bankruptcy filings, which do remain reported. Checking all three credit bureau reports is important, as information can sometimes vary between them.

Addressing Inaccuracies on Your Credit Report

If you identify any inaccurate or incomplete information related to an eviction on your credit report, you have rights under the Fair Credit Reporting Act (FCRA) to dispute these errors. The dispute process involves contacting the credit bureau reporting the incorrect information. Submit disputes in writing, preferably by certified mail with a return receipt requested, to maintain a clear record.

Your dispute letter should identify the items you are challenging and explain why you believe the information is inaccurate. Include copies of supporting documentation, such as payment confirmations, court orders, or correspondence. Credit bureaus are required to investigate disputes within 30 to 45 days of receiving your notification. It can also be helpful to contact the original creditor or collection agency that provided the information, informing them of the inaccuracy and providing evidence.