What is an Eviction and How Does It Affects Your Credit?

© Spencer Grant / Photolibrary / Getty

What is an Eviction?

An eviction is the legal process in which a landlord removes a tenant from a rental property. Many evictions happen because the tenant has not paid rent, or even because the the tenant is habitually late on the rent. You can be evicted for other reasons depending on the terms of your lease. For example, your landlord may be able to evict you for damaging the property or for using the property for illegal reasons.

Eviction laws vary by state, but an eviction typically doesn't come at a surprise. Most states require the landlord to give notice to the tenant to clear up the issue or leave the rental property before the legal eviction process can begin. You can move out when you receive this notice and avoid the court eviction process altogether. Moving once you've received the notice may keep the eviction off your credit report, as long as the landlord doesn't have to file for an eviction in court and if you pay any rent or fees that are still due. 

If you don't vacate the property after receiving the initial notice, the landlord may file papers with your local court to have you evicted. Note that you should respond to any summons even if you have already moved out of the property.

How an Eviction Affects Your Credit 

The eviction won't directly show up on your credit report, but eviction-related information will.

If the landlord uses the court to evict you and obtains a judgement against you, the judgement resulting from that eviction will be placed on your credit report in the public records section.

With a judgement for a property management company on your credit report, any business checking your credit report will likely assume that you were evicted.

Unfortunately, the judgement will damage your credit score, make it harder to rent in the future (especially because it's a judgment for a property management company), and hurt your chances at getting approved for a credit card or loan.

Like most other types of negative information, the eviction can stay on your credit report for up to seven years. If the statute of limitations for unpaid judgments is more than seven years in your state, the eviction can be reported up until the statute of limitations runs out.

You can (and probably should) pay off the judgment once you can afford to do so. Paying off the judgement won't remove it from your credit report, but it may improve your chances of getting a rental in the future, especially as the eviction and the judgment age.

Even if you move before the eviction goes to court, your credit can still be affected. For example, if you still owe rent or fees and the landlord can use a collection agency or small claims lawsuit in small claims court to get what you owe. Both these actions will go on your credit report and hurt your credit score.

Some landlords report to tenant screening services, like Experian's RentBureau or TransUnion's SmartMove, so even though your credit report may not read "eviction", a check with one of these services will reveal your eviction record.

Renting after an eviction is hard so if you can avoid being evicted, by all means do so. Talk to your landlord about the issues and try to work out a deal to avoid the eviction process. If money is the problem, get a second job, reduce your other expenses, or try to borrow money from a friend or family member.