Does Eviction Affect Credit Score?

Here are some of the questions that people ask: Does eviction affect your credit score?

Being kicked from a rental house can be a quite trying and demanding event. Not only do you have to choose a new place to live quickly, but if the information is sent on to credit reporting agencies, an eviction may damage your credit. Here you will find other steps you can take, how an eviction record might show up on your credit report, and how it might affect your credit score.

How Does Eviction Affect Credit Reports?

Should a landlord evict a tenant from a house for nonpayment of rent or any other reason the lease agreement forbids, the landlord may notify the three credit bureaus— Equifax, Experian, and TransUnion. Although eviction is not required, it is somewhat typical for landlords to report the tenant's past to inform future landlords.

Should an eviction be recorded to the credit bureaus, it may show up in the part dedicated to public records on your credit report. It will include details on the eviction, including the amount owing and the reasons the renter was kicked out. Furthermore shown on the credit report might be outstanding balances owing to a landlord and those still overdue. Your credit score can be influenced by even eviction records and any connected collections.

How the Process of Eviction Affects Your Credit Score?

It is, however, important to note that the extent to which your score will be affected by an eviction will depend on your current score and credit history. For instance, a person with good credit and a positive payment history may only experience a minor decline in the score. Still, people with fair or bad credit face much higher losses.

This is based on the FICO and VantageScore credit scoring models that identify collection accounts and public records as comprising approximately 15% of the credit score. If you already have a poor credit score and several negative items on your credit report, an eviction will drag your score down. The LRV also found out that scores decline by 50-100 points or more after an eviction is made.

Deletion of An Eviction From a Credit Report

On a credit report, an eviction record can be legally reported for up to 7 years from the date of occurrence. Fortunately, there may be ways to get the specifics removed earlier in some instances.

If you paid your landlord and he/she agreed to withdraw the eviction complaint, you can ask the landlord to contact the credit bureaus. When identified, the credit bureaus are mandated to delete the inaccurate, unverifiable information in a credit report. Therefore, if the landlord provides a statement that the eviction was settled or should not have been filed in the first place, the credit bureaus must delete it. This is the best way to ensure the situation is resolved as soon as possible.

It is also possible to dispute the records of evictions that you consider to be inaccurate at each of the credit bureaus. Under the law, bureaus have a month to reply when investigating a report of invalid statistics. If they are unable to confirm the eviction after speaking with your former landlord they must delete it.

minimizing credit impacts of an eviction

1. If you get an eviction notice, initially you should discuss the matter with your landlord and ask whether they would be ready to drop the matter should you pay the rent or leave the premises immediately. This will guarantee that initially the eviction will never show up on your credit report.
   
2. Collections account: This should be paid right away should the renter have unpaid rent or any other charges and have them forwarded to the collections agency. Paying collection accounts helps to increase your credit score over time, but it does not mean that the bad item will show on your credit record.
   
3. Steer clear of establishing new credit lines. One of the worst times to think about opening new credit accounts is after eviction. Every application will conduct a thorough investigation and most likely result in a denial due to negative influence on your credit. Applying for new credit should wait until your scores start to improve.
   
4. Apart from managing the aftermath of the eviction – last but not least, one must carry on paying all the other credit accounts and invoices on time. This will start you creating a good payment record and aid to lessen the effect on your credit score.
   

Recovering From an Eviction

Recovery from an eviction may not be swift or without some challenges; however, with time and effort in fixing mistakes on your report, it is possible. You should also ensure that you review your credit reports from time to time to ensure that there are no errors. If you stay current on all other accounts, the impact of the eviction will decrease month by month as good information accumulates. Most individuals can get back on their feet from an eviction within 12-24 months provided they start emulating proper credit conduct. However, the best way to avoid eviction is to ensure that it does not happen in the first place if at all possible.

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