March 28th, 2013
How Does an Eviction Affect My Credit?
14 Comments |
Chances are you don’t know what that means, unless you’ve been expelled from your home. It’s the technical term for the legal action taken to evict someone from a property.
Unsurprisingly, evictions most frequently occur when a tenant has broken the terms of his or her lease, like when you fail to pay rent. That kind can do a number on your credit health. But there are other types as well.
Today, we’ll take a quick look at the different types of evictions and then go over how an eviction can affect your credit.
Different Kinds of Evictions
There are four most common types of evictions.
- Failure to pay rent. When a tenant is late in paying rent, the landlord can issue a three-day notice to “pay rent or quit.” If the tenant pays during that three-day period, he’ll be able to stay. Even a partial payment, if accepted by the landlord, negates the notice of eviction. But if the tenant fails to pay, the owner has to file an unlawful detainer to regain possession of the property.
- Breaking the terms of a rental agreement. If a tenant goes against the terms set out in his rental agreement–such as keeping a pet on the property when not allowed–the landlord can give a ten-day notice for the tenant to comply with the agreement or leave the property. If the tenant fixes the problem, he gets to stay. Otherwise, the landlord can move forward with the eviction process.
- For creating “waste or nuisance.” In simpler terms, this is an eviction for being a messy and destructive tenant. It can also be issued if the tenant is conducting unlawful activity on the premises. When this three-day notice is given, the tenant has no option to remedy the situation–he has to move out.
- For no cause. As long as the eviction isn’t proven to be discriminatory or retaliatory, a landlord can evict a month-to-month tenant without stating a specific reason. The difference here is that the tenant receives a 20-day notice, which must come at least 20 days before the next rent is due. This type of eviction is not permitted in some larger cities.
How does an eviction get on my credit report?
It’s important to know that just receiving an eviction notice isn’t what puts it on your credit report. An unlawful detainer must be filed in court. The property manager has to obtain an eviction judgment from local small claims or civil court.
Once the judge has ruled in favor of the property manager and the judgment is final, the three major credit bureaus will receive notices of the eviction and add it to the tenant’s credit report in the form of a public record.
How does an eviction affect my credit?
Evictions that go to court and are filed as judgments against you are treated as public records on a credit report. A public record stays on your credit for up to seven years from the date it’s filed, and it can’t be removed early in most cases. It can have several affects on your credit and your life in general:
- It’ll ding your credit score. This is the most obvious affect. You can simulate how several different types of public records can affect your credit score with the Credit Simulator.
- It’ll hurt your chances at a job. Though not all do, an employer can check potential job candidates’ credit report. A public record on your credit report can be a red flag for some employers. But there are ways you can prepare yourself if you’re on the job hunt and you’re worried about a black mark on your report.
- It’ll make it hard for you to rent again. It’s not impossible, but finding a new apartment with an eviction under your belt can be tough. Here are a few tips to help:
- Start improving your credit health immediately. Use the guidelines in this blog post: My Credit Is Terrible. Now What?
- Use a rental brokerage service. Explain your situation to them and see if they can help you find an apartment without a background or credit check.
- Be willing to compromise. Offer to pay a higher security deposit and definitely be ready to explain any helpful circumstances of your eviction.
Bottom Line: I don’t have to tell you to avoid an eviction at all costs–that much is obvious and unhelpful if you already have one on your credit report. But this guide should help you better understand your situation and turn things around for the better. Good luck!
Have you bounced back from an eviction? Tell us about it in the comments!
Bethy Hardeman is the Social Media Manager and Writer at Credit Karma, where she’s been since February 2011. When she’s not writing about credit and finance all over the web, you can find her playing her guitar, catching the latest movie, training for her next race or just exploring the city of San Francisco. Say “Hi” on Twitter: @bhardeman.
Follow Credit Karma!
Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.