How eviction can affect your credit
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Eviction is a word that doesn’t sound very good to most people, and for good reason. It means you’ve been legally forced from your home, usually because you failed to pay your rent. So, it’s logical to assume being evicted will hurt your credit. But you might be surprised to learn that the eviction order itself isn’t what hurts your credit directly.
- Roughly 2.3 million people face eviction every year in the U.S. (Diario AS)
- Between 2000 and 2018, 69.7 million eviction cases were filed in the U.S., averaging about 3.6 million filings annually. This represents approximately nine eviction cases per 100 renters. (Proceedings of the National Academy of Sciences)
- Evictions increase in the summer months. (New America Nonprofit)
- South Carolina experienced the highest eviction rate of any state (6.2%) with an average of 26,430 evictions per year. Other states with high eviction rates include Arizona, Virginia, and Delaware. (New America Nonprofit)
- Filing and eviction rates are, on average, higher for Black renters than for white renters. (Eviction Lab)
- Black individuals made up 19.9 percent of all adult renters in the counties for which we had data, but 32.7% of all eviction filing defendants. (Eviction Lab)
- Black renters experienced the highest rates of eviction filing at about 6 percent, while the average eviction filing rate among white renters was 3.4 percent. (Eviction Lab)
- Across the 1,195 counties in our sample, we predicted that 341,756 women were evicted annually, approximately 16% more than the 294,908 evicted men. (Eviction Lab)
What is eviction?
An eviction is when a landlord gets a court order to legally remove a tenant from a property. Evictions occur when a tenant has violated the terms of the lease, typically for failing to pay rent. However, tenants can be evicted for other reasons such as committing crimes or acts of violence, not complying with community health and safety standards or for having unauthorized subletters or pets.
It’s been estimated that there are roughly one million evictions in a typical year in America, which means around 2.3 million people are removed from their homes every year. South Carolina has the highest eviction rate of any state at 6.2 percent, according to News America, and other states with high eviction rates include Arizona, Virginia and Delaware.
Furthermore, non-white households have higher rates of eviction than predominantly white households, according to Eviction Lab, and women are evicted at a rate of 16 percent more than men.
What to do if you receive an eviction notice
When you receive an eviction notice, you are being informed that a legal process has been initiated. This can lead to the court issuing an eviction order. Some evictions are curable, meaning that there’s action that can be taken to fix the problem and remain in your home. For example, if you’re behind on your rent payments, you can catch up.
But with an incurable eviction notice, you’ll have no choice but to vacate. Thankfully, you always have the right to appear in court and fight the eviction. The rules vary from state to state and even in certain cities, so it’s up to you to learn the laws of your community or contact an attorney that can help you.
What happens if you get evicted?
As with most court proceedings, you are allowed to have an attorney when your case is heard. Not having a lawyer can put you at a severe disadvantage compared to the landlord. Fortunately, there are organizations that can help tenants facing an eviction fight in court, such as community legal services and legal clinics sponsored by your local bar association.
But if you’ve had your day in court and lost, the judge will likely issue an eviction order forcing you to move out as soon as possible. If you don’t leave when ordered to, many jurisdictions allow the police to help enforce a judge’s eviction order. That’s why you should be looking for a short term living arrangement anytime you’ve received an eviction notice and are awaiting a court date.
Does eviction show up on your credit report?
Interestingly, an eviction itself won’t appear on your credit report. However, if you’ve been evicted for non-payment of rent, then it’s likely that the landlord will hire a collections company to pursue your debt. It’s this debt that will appear on your credit report and hurt your credit score, not the eviction order itself. And if you have a cosigner or guarantor of your lease, then the debt will appear on their credit report as well.
Having a low credit score can affect you in many ways. It will be harder to get loans of any kind, including credit cards, automobile loans and personal loans. And when you do qualify, the rates and terms that you’ll receive for won’t be nearly as favorable as they would be for those with high credit scores. Having a low credit score will also make it hard to rent a home again.
There’s no way to know precisely how much your credit score will be hurt by a collections matter resulting from an eviction. But for those with high credit scores, it could be more than 100 points. For those who already have lower credit scores, the account in collections may not have as big an impact.
An eviction order will also appear in public records, which future potential landlords could discover. An eviction notice can appear in your city or state’s website, and there are numerous tenant screening services that landlords can use to find eviction records. You can also request copies of your credit reports that can show any collections accounts related to past due rent.
Needless to say, if potential landlords find out that you have been evicted, they will be far less likely to rent their property to you.
How to remove an eviction from your record
If you’ve been wrongly evicted, you can pursue legal action in court. And if you’ve had past due rent go to collections, then you can settle it. Once settled or paid off, you can also ask to have any collections accounts removed from your credit report. Another tactic is to ask to have the eviction records removed from tenant-screening reports as a condition of repayment of past due rent.
Nevertheless, eviction orders can still show up in public records for as long as seven years. And while the eviction itself won’t appear on credit reports, it will continue to appear on tenant-screening services and other background checks.
How to avoid eviction in the first place
The best way to make sure that there isn’t a record of being evicted is to avoid the eviction altogether. If you’ve been issued an eviction notice, then you may still have time to fix the problem before going to court. If the reason for the eviction is failure to pay rent, catching up is one option.
But if you’re unable to pay what you owe, consider speaking to the landlord about possibly moving to a more affordable unit. And if there are other reasons for the eviction notice, it’s best to take action to fix them, rather than go to court and risk an eviction order. If you have the option of working with the landlord to solve the problem that led to the eviction notice, that will be your best option.
How to rent again after an eviction
If you’re looking for a place to rent again after being evicted, there are still some options. First, you could find a private landlord that may be willing to understand the circumstances that led to the eviction, and give you another chance. It can help if you can provide documentation of a special circumstance that led to your eviction that’s unlikely to reoccur, such as a health problem or a natural disaster. Offering up detailed personal references can also help.
If all else fails, consider trying to live with friends or family members while you rebuild your credit. For example, you could get a credit card for people with bad credit, and continue to make on-time payments to other lenders. You can also use a rent reporting service to include any rent you are paying under your current living situation.
The federal government’s Consumer Financial Protection Bureau (CFPB), lists many renter protection resources on its website.The National Center for State Courts also lists many local housing legal aid providers on its website. And if you feel that you’ve experienced housing discrimination, the following groups may be able to help:
The bottom line
Having an eviction on your record won’t directly affect your credit, but having a collection item related to an eviction will appear on your credit reports and hurt your credit score. The best way to prevent this is to work with your landlord and avoid being evicted. But thankfully, there are legal resources available to renters. By understanding what eviction is and how it affects your credit, you can do your best to make sure that it never happens to you.