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What happens to your credit when you’re evicted (and what to do about it)

If you’ve been evicted, you probably wonder how it will affect your credit. Will you be able to find a new place to rent? How long will it be a problem? And what can you do about it?

While it’s better to avoid eviction in the first place, sometimes life happens. There are steps you can take to improve your situation. This article will cover what happens to your credit after eviction and what you can do about it.

Click Here for the “If You’ve Been Evicted” E-book

How an eviction affects your credit

Evictions themselves are not reported directly to the credit bureaus. However, they can still affect your credit under certain conditions. There are two ways evictions can affect your credit:

  1. If you fail to pay rent and the property manager sends the late payment to a collection agency. The collection agency will report this information to the credit bureaus. The information will remain on your credit for 7 years.
  2. If the eviction goes to court and results in a civil judgment against you for unpaid rent. The civil judgment is put on your credit report and remains there for 7 years.

The best way to try to prevent credit problems is to work with your property manager and make arrangements to pay back all the rent owed. The sooner you do this, the less likely your credit will be negatively affected. Even if it has already been affected, it shows you were responsible and repaid what you owed.

What to do if an eviction affects your credit

If you’re uncertain whether your eviction has affected your credit, get a free report and check it.

Dispute incorrect reports

If an eviction has affected your credit and the information is wrong, take steps to correct it. You can dispute credit report errors by mail, phone, or online. If you need legal assistance, contact Legal Aid.

Pay what you owe

Make it right. If you pay what you owe, this information can be noted on your credit report.

If you have a collection on your credit, pay the money you owe. Work with the property manager (or landlord) and request that they note the repayment on your credit (or get it removed, if they can).

If you have a judgment against you, pay the judgment. When you do this, your credit report will show that the judgment was “satisfied.” Though the judgment will still appear on your credit for seven years, it shows that you took the responsibility to pay what was owed. Anyone looking at your credit report will see a satisfied judgment as better than unsatisfied.

Repair your credit

Get current on any bills that are overdue. Your payment history is the biggest factor in determining your credit score. By getting everything up-to-date, your credit score will go up. If you cannot pay all of an overdue bill, contact the creditor to work out a payment plan.

Pay accounts that are charged off and/or in collections. Either pay in full or pay an agreed upon amount to the creditor to achieve a $0 balance.

Pay your bills on time every month. This will boost your credit score over time.

Reduce the amount of debt owed. If you can, pay down your debt. Don’t move debt from one credit card to another, keep balances low and pay them off when possible.

Keep credit inquiries to a minimum. This means not applying for a bunch of new credit cards in an attempt to raise your credit score.

Wait to get new credit. Later on, you can add a credit card or other loan to show you are paying your debt off on time, every time. Wait until you catch up on all your bills and can afford to take this step.

Don’t close cards you are no longer using. Even if you’ve paid the balance and no longer use a card (congratulations!), the act of canceling a card can affect your credit. Once you’ve raised your credit score, you can begin to cancel cards slowly. If you’re afraid you’ll use the cards and don’t want to, freeze them in water or otherwise make them inaccessible.

Get help

If you’re overwhelmed and need help, seek out a reputable credit counselor to assist you. Reputable credit counselors are trained, certified, and work with non-profit organizations. They can help you put together a debt repayment plan that will fit your needs.

“A reputable credit counseling agency should send you free information about itself and the services it provides without requiring you to provide any details about your situation.” -Federal Trade Commission

Do your homework. Check for complaints with the Attorney General’s office. Ask about any fees, qualifications, and licensure. Ask questions and get an understanding of how the process works. Don’t sign anything unless you completely understand it. If in doubt, contact Legal Aid for assistance.

At Coluzzi Real Estate, we care about our community. We go the extra mile to provide you and your family with the information you need.

Disclaimer: This article is not legal advice. If you have questions or concerns about the laws, we advise speaking with a lawyer.

2018-12-18T08:40:41-05:00

About the Author:

Amanda has lived in the Des Moines area since 1999, where she and her husband have bought and sold a handful of homes over the years, including a recent flip. Amanda enjoys writing, obsesses about personal finance and is fond of looking at houses. She loves sharing useful tips and info to make life easier for anyone wanting to buy or sell a home. In her spare time, Amanda cherishes time with her family, volunteers with IHYC, gardens, hikes, and practices TaeKwonDo.