How Long Does a Broken Lease Stay on Your Credit in Texas?

Credit reports record an individual’s financial behavior, influencing access to financial products and housing. Lenders and landlords review these reports to assess financial reliability. A “broken lease,” a breach of a rental agreement, can significantly impact one’s financial standing. This article explains how broken leases appear on credit reports and how long they remain visible.

Understanding a Broken Lease in Texas

In Texas, a lease is broken when a tenant violates their rental agreement, leading to early termination or an unresolved breach. This includes moving out before the lease expires without consent, failing to pay rent, having unauthorized occupants, or causing property damage beyond normal wear and tear.

Texas law requires landlords to mitigate damages, meaning they must make reasonable efforts to find a new tenant. If successful, the original tenant may only be liable for rent during the vacancy and re-leasing costs. If the landlord cannot mitigate damages, the former tenant remains responsible for the entire lease term’s remaining rent.

How Lease Violations Affect Credit

A broken lease can impact a consumer’s credit report through several mechanisms. Direct reporting by individual landlords is less common, as landlords or property management companies do not have direct access to credit bureaus to report routine payment histories or lease breaches. Instead, the negative impact often arises when unpaid rent or damages become a debt.

When a landlord pursues an outstanding balance from a broken lease, they may send the account to a debt collection agency. These agencies report delinquent accounts to the major credit bureaus, including Equifax, Experian, and TransUnion. Once a collection account appears, it signals to future creditors and landlords that a prior financial obligation was not met.

Court judgments, such as those from an eviction lawsuit or a money judgment for unpaid rent and damages, also play a significant role. These civil judgments become public records. Credit bureaus scour public records for such information, and if a judgment is found against an individual, it can be added to their credit report, impacting their financial standing.

Credit Reporting Timelines for Lease Issues

Negative information related to a broken lease remains on a credit report for a specific period, impacting future financial decisions. Most negative items, including unpaid rent that has gone to collections or been charged off, can stay on a consumer’s credit report for up to seven years. This seven-year period begins from the date of the original delinquency, which is the date the payment was first missed, not when it was reported to a credit bureau or sent to collections.

Even if a collection account is eventually paid in full, the record of the collection account itself will remain on the credit report for the full seven-year period from the original delinquency date. The status may update to “paid,” but the negative entry still indicates a past financial obligation that was not met on time. While paying the debt is beneficial, it does not immediately remove the negative mark from the report.

Eviction records, which are civil judgments, also remain on a credit report for seven years from the date the judgment was entered or filed in court. Understanding these timelines is important for individuals seeking to rebuild their credit after a lease-related financial event.

Disputing Credit Report Information

Consumers have the right to dispute inaccurate or incomplete information on their credit reports, including entries related to a broken lease. The Fair Credit Reporting Act (FCRA) grants individuals the right to challenge items they believe are incorrect. This process begins by obtaining a copy of one’s credit report from each of the three major credit bureaus: Equifax, Experian, and TransUnion.

These reports can be accessed free of charge once every 12 months through annualcreditreport.com. Once obtained, individuals should carefully review them to identify inaccuracies, such as incorrect dates, wrong amounts owed, or accounts that do not belong to them. Discrepancies should be noted for the dispute process.

A dispute can be initiated directly with each credit bureau online, by mail, or over the phone. It is advisable to provide supporting documentation that helps substantiate the claim, such as payment records, court documents, or correspondence with the landlord or collection agency. The credit bureaus are required to investigate the disputed information within 30 to 45 days. Consumers may also consider contacting the data furnisher, such as the landlord or collection agency, directly to dispute the information and request its correction or removal.