What Effect Can an Eviction Have on My Credit?
If you are facing an eviction or have been evicted in the past, you may be concerned about your credit and the possibility of finding accommodation to rent in the future. While having an eviction on your record might make things more complicated, it’s certainly not the end of the world.
How serious is an eviction? An eviction sounds scary and indeed it can be a difficult time if you experience it. But all is certainly not lost, and many individuals and families improve their credit scores after evictions. It doesn’t have to shape your whole life. Here’s what you need to know about eviction and credit.
What is your credit rating and why is it important?
First, let’s clarify why your credit score really matters. Your credit score is a number assigned to you that varies between 300 and 850 but changes over time. Your credit score sums up your creditworthiness, and the higher the better.
Your credit score is calculated based on your credit history and takes into account things like your overall debt level, your repayment history, the number of accounts you currently have open, and other factors.
Your credit score is important because lenders and homeowners use it to assess whether you are creditworthy. This can affect your ability to get a loan from a bank or rent an apartment. If your credit score is too low, a potential landlord may fear that you may not be able to pay your rent on time.
What is an eviction?
An eviction is a legal process that landlords can use to evict a tenant from the property. Evictions usually happen when a tenant doesn’t pay part of their rent, but a landlord can’t just evict a tenant for no reason. Instead, your lease or rental agreement will outline the specific reasons a landlord can evict a tenant. These include things like:
- Failure to pay rent or repeated late payments
- Using property for illegal activities
- Sublet an apartment without the owner’s permission
- Behavior that seriously disturbs other tenants or neighbors
Although rules vary from state to state, a landlord must provide written notice of eviction before they can legally evict a tenant. If you receive an eviction notice, you have several choices about what to do next. You can:
- Go out as directed
- Negotiate with your landlord and agree to resolve the issue to their satisfaction (for example, you could pay off rent due in installments)
- Challenge the eviction in court
Your chances of winning in court depend in part on why you were deported and your state or local laws. Some cities or towns are more tenant friendly in these cases than others.
What is the effect of eviction on credit?
Many landlords or property management companies will perform a credit and background check on potential tenants before agreeing to sign a lease. While evictions don’t show up directly on your credit score, they will be able to see if a landlord or other debt collector has sued you for unpaid bills. So there may be an indirect effect of evictions on your credit.
How does an eviction affect future rental?
While there is no hard and fast rule, a general rule of thumb is that landlords like to see a credit score of 620 or higher for a potential tenant.
You can check your own credit score quickly and easily and for free on many online banking systems. Mint is also a great resource and can also check your credit score for free. It is generally a good idea to keep an eye on your credit score over time, but especially before submitting a rental application. If your credit score drops lower than you would like, there are ways to build credit and improve your credit score so that you appear more reliable and more creditworthy to a potential homeowner.
Rent with eviction
While it can be a bit more difficult, renting accommodation with an eviction on your account is certainly not impossible. Here are some tips to keep in mind:
Try to remove the eviction from your rental history
You may be able to work with your former landlord or former property management company to negotiate a way to remove an eviction from your rental history. For example, if you’ve been evicted because of your rent, you can agree to pay the amount you owe in installments in exchange for removing the eviction from your history. If you believe you have been evicted by your landlord without cause, you can also take legal action to have the eviction removed from your case.
Tell the truth
If you still have an eviction on your record, the best way to deal with a new owner is to be upfront. Be prepared to explain that you were kicked out, what happened and why it is unlikely to happen again. For example, if you’ve been laid off during a recession and you’re unable to find work right away, the owner may be more sympathetic. Either way, an owner will appreciate finding out the truth from you, rather than through a credit report or reference check.
You may also have to work a little harder to convince the landlord that it is worth hiring you as a tenant by paying a higher security deposit, paying a slightly higher rent, or getting several good references. from previous owners.
Improve your credit
In the meantime, you can also work on improving your credit so that future rentals bring you less hassle. As we have already noted, an eviction will not show up directly on your credit score, but could affect your credit score indirectly. There are a number of ways you can improve your credit score, such as paying off your loans and paying your bills on time.
If you think you might be evicted or have been evicted in the past, take the time to educate yourself on the effect an eviction can have on your credit score and your ability to rent. This will ensure that you are well prepared to improve your credit score or to have a frank conversation with your next landlord.