To start, no, an eviction itself won’t show up on your credit report. However, if the eviction is due to defaulted mortgage or rent payments, and your lender or landlord sends the debt to collections, the collections account may appear on your credit report and have an impact on your credit score. Let’s investigate how evictions work, the process can potentially impact your credit, and why making payments on time and knowing your options can help you protect your creditworthiness.
What is an eviction?
An eviction occurs when a tenant is forced out of the property they either rent or own. Landlords or lenders are the parties who may file the legal documents to evict. This can happen due to lack of payments for rent, maintenance fees or a mortgage.
How an eviction works
The eviction process can take a long time. In fact, because it’s a lengthy procedure, an eviction won’t likely come as a surprise to you. Eviction proceedings often begin with a letter typically called a Pay or Quit Notice. If you get this notice, it’s a formal warning that your contract with a lender or landlord is considered breached or in default.
A Pay or Quit Notice usually includes a date by which you can either make payments to fix your default or move out of the property. If you don’t move out or make the payments owed, the landlord or lender can file for an official eviction in court. When that happens, you may receive a summons to notify you of this filing. At this point you may be called to appear in court and defend your case.
What can I do if I’m facing eviction?
If you get summoned to court for an eviction, this may be a good time to investigate your tenant rights. Each state has different eviction laws and tenant protections, but they’re publicly available for review. This information could help you follow the law and protect yourself while working through this process. You could also find legal counsel within your budget to help with the eviction proceedings.
If you get an eviction notice, there are several situations that may come next. These may include the following.
- Summons: You may be called to court.
- Agreement: You may come to a repayment agreement with your lender or landlord.
- Vacate: You may be required to vacate the property.
If you appear in court, the judge may approve a repayment agreement or terminate your right to inhabit the property. Your lender or landlord may decide at any point to send the default payments to collections, at which point the collections account can appear on your credit report and impact your credit score. If you are evicted and required to leave the property, this may be recorded in a rental history report separate from your credit report.
Preparing for an eviction proceeding
There are documents to collect in efforts to protect yourself and make your case during an eviction. Below you’ll find a list of what can help you through this legal process, especially when you may face a judge.
- Contracts for your mortgage, maintenance fees, or lease.
- Pay stubs, tax forms, and any other evidence of income.
- Hardship documentation such as unemployment or bankruptcy forms.
- Proof of your timely payments on a mortgage, maintenance fees, or rent to dispute the claim of default payments
Potential ways to keep an eviction off your credit report
At the judgement stage of the eviction process, you still have a few options and can negotiate for better repayment terms. For instance, there are three potential alternatives to eviction that may serve you better.
- Pay and Stay: In this legal agreement you can negotiate for new terms in your tenant or mortgage contract. This type of agreement usually includes a repayment arrangement. A Pay and Stay arrangement may even allow you to remain on the property.
- Dismissal With Leave to Reinstate: The Dismissal With Leave contract can work as a temporary limbo for you when facing eviction. It usually involves leaving the property for an agreed-upon period. You may then return to the property after satisfying a contractual repayment schedule.
- Agree to Move Out With Compliance: This is a type of compliance agreement, in which you can sign a contract agreeing to move out. If you comply, the landlord or lender may agree not to send your default payments to collections.
These legal alternatives may help you keep an eviction off your credit history. Options like this show how you could make a difference when you get a notice of eviction to try to protect your credit score.
Does an eviction hurt my credit score?
As stated above, an eviction itself does not appear on your credit report and therefore does not affect your credit score. If your landlord or lender sends your unpaid debt to collections during the eviction process, then that will show up on your credit report. Late or negligent payments that go to collections can tarnish your credit report for up to seven years and lower your credit score. Missed or late payments on credit accounts can show up on your credit report and affect your credit score even before the debt is sent to collections, so it can serve you to make timely payments a matter of habit.
Can I improve my credit score after an eviction?
Yes. If you experience an eviction and it lowers your credit score, there are steps you can take to improve your credit going forward. Resources like Chase Credit Journey® can help you along the way. Here are some steps and tools to help illustrate a path to better credit.
- Check your credit score: Free with Chase Credit Journey®, checking your credit score can help get an idea of where you stand anytime. Best of all, looking at your standing with Chase Credit Journey® won’t lower your credit score.
- Credit monitoring: No matter what situation may have lowered your credit score, credit monitoring can help you improve it. This service can give you a window into your credit activity and insights into how your score is impacted.
- Activity alerts: Chase Credit Journey® can also provide helpful account alerts to help you stay aware and get a handle on your credit activity. That may include when you make timely or late payments, as well as when you apply for new credit accounts. When working toward a better credit score making payments on time and keeping an eye on your accounts can make a difference.
While an eviction itself does not show up on credit reports, missed payments and collections accounts can. There are steps you can take to help prevent this from happening to you. If you find yourself with a lower credit score due to an eviction, you can help improve your credit score with Chase Credit Journey®.