How Does an Eviction Affect My Credit Rating?December 2nd, 2009 by Staff Writer
Lots of the American individuals and families who rent their homes and move on a periodic basis might be asking “how might an eviction affect credit“-and they are getting some interesting answers. It turns out that, although there is a comprehensive national system for establishing credit history, the way an actual eviction goes into the equation is a little more complex.
Your Credit Score
Each American individual has their own credit history. Yours might be blank, if you have no past reported transactions, or it might be a mix of positive and negative elements. Your overall credit report is reported in three portions, from three established national credit agencies that have been given exclusive jurisdiction over this kind of credit record keeping: Equifax, Experian and Transunion. Another company, the Fair Isaac company, governs the interpretation of collective FICO credit scores for individuals.
What ends up on the records of one credit reporting agency might not be in the files of another, so consumers are frequently confused about reports that come back from third party credit report requests. Amidst this confusion, many end up wondering whether an eviction will be added to their open that judgments are their credit report that drag down a total score.
Evictions, Rent Collections and Other Items
If your landlord pursues collections action against you, that collection activity might end up on the credit report. However, the actual eviction will often not. And eviction itself is not a typical debt collection transaction, but a public record of a specific landlord tenant situation. As such, it is not typically part of a conventional credit score. It’s important to note, though, that there are many exceptions to this rule, including leases backed by a credit card, debt judgements that often go hand in hand with an eviction, and things like “Unlawful Detainer”, where damage to a housing unit can end up on a credit report. Therefore, although the eviction itself may not end up on your credit report, something else negative might.
Although your eviction may not show up in your credit score, where it often does show up is in tenant screening reports. These types of reports are provided to a landlord by a number of different companies. Although in the beginning tenant screening may have been dominated by a couple of companies, today there are many tenant screening services competing for the business of each individual landlord. Many of these companies operate online.
A tenant screening service collects public data like evictions and passes it on to landlords. What this means is that a tenant who has been evicted in the past can be effectively blacklisted from renting if their information consistently gets passed to a landlord who is using a tenant screening report as a guideline for making rental decisions. Too often, it’s difficult for the consumer to see exactly where this information comes from. However, consumer advocates say that the companies providing rental screening often take the information straight from a courthouse through scanning a public record system and compiling their own databases of evictions and other events.
The above illustrates how a lot of tenant screening processes work these days regarding a history of eviction.