An eviction doesn't automatically disqualify you from getting a mortgage.
But if you get evicted for not paying rent, your landlord can send the debt to a collection agency or take legal action against you. In these cases, lenders will see evidence of the eviction on your credit report or on your record during a background check.
Some lenders may reject your application, while more lenient lenders may give you a loan with a higher interest rate or a larger down payment requirement.
Does an eviction go on your credit report?
An eviction doesn't go on your credit report, but it can still affect your credit score.
"Evictions don't directly impact one's credit score. ... [But] in most cases, landlords will report your unpaid rent to a debt collection agency, and THAT will show up on your credit score," explains Martin Orefice, CEO of Rent to Own Atlanta.
The debt sent to a collection agency will show as a charge-off and collection account on your report under the adverse accounts section. You can see an example of a collection account in this sample credit report from the University of Wisconsin-Madison.
Aside from selling your debt to a collection agency, your landlord can also file a lawsuit against you. This legal action results in a judgment, which is "an official result of a lawsuit in court."[1]
Judgments used to appear on credit reports under the public records section, but this is no longer the case. "Legal proceedings do not show up on regular credit reports. Lawsuits, tax liens, evictions, etc. stopped showing up on credit reports years ago," says Ashley Morgan, a debt and bankruptcy attorney in northern Virginia.
However, judgments can still appear on your public record, which a lender can see during a background check. But "even with a legal judgment on your record ... you can still get a loan if your credit score and debt-to-income ratios fall within the qualifying standards," says Evan Karam, a 14-year real estate professional and owner of WeBuyCasa.com.
How badly does an eviction impact your credit?
The impact on your credit depends on how your landlord handles the eviction.
If your landlord sells the past due debt to a collection agency, it will show as a collection account on your report. "A collection account can lower a credit score by 50–150 points and remains on the credit report for seven years," explains Steven Parangi, owner of Alpine Mortgage.
If your landlord reports the past due payments, it will appear in your payment history. Your payment history makes up 35% of your overall credit score, so negative items in this section could cause your score to drop significantly.
In some scenarios, an eviction won't lower your score. "If the account is just a judgment and not reporting in collections, then the eviction likely won't be impacting your credit. Similarly, if you pay off the eviction balance before it is reported on your credit, it likely will never report," says Morgan.
How to get an eviction off your credit report
The first step is paying off your rental balance and any additional eviction fees. "If you pay off what you owe, settling your debt can help improve your score," says Karam.
If you can't pay off your debt in full, try negotiating a written settlement with your previous landlord. Offer to pay a portion of your past-due rent or eviction fees in exchange for them contacting the credit bureaus to have the eviction removed. Keep in mind that the landlord has no obligation to accommodate you. They may insist you pay all past-due rent plus fees.
If you work out a deal, have a way to hold your former landlord accountable for notifying the credit bureaus. You could ask the landlord to provide you with copies of the letters they send to the bureaus and slips for certified mail in exchange for a check.
If you can’t come to an agreement, the collection account should roll off your credit report after seven years.
You can dispute inaccuracies on your credit report if the collection account isn't removed after your landlord requests it or after seven years have passed.
To dispute, "first pull your credit report from all three credit bureaus and look for any inaccuracies, and then write a dispute letter [to the credit bureau(s)] explaining the error and include any supporting documents. The credit bureau will review and remove from your record if anything is incorrect," says Karam. You may have to follow up with the credit bureau several times to get the information removed.
For information on how to write a dispute letter, read the Consumer Financial Protection Bureau's sample letter to dispute credit reports.
Can you get evictions off your record?
An eviction can also show up during a background check. This could prevent you from getting a job or being approved to purchase a home or condo with a homeowners association (HOA).
To remove an eviction from a background check, find the county where the case was filed. You can petition to have the record expunged or sealed, but you might have to pay the balance owed in full.
How to buy a house with bad credit
You can still buy a home if you have a bad credit score.
Before applying for a mortgage, take steps to improve your credit score. "Focus on rebuilding credit by making timely payments on all accounts, reducing credit utilization, and possibly opening new credit accounts to improve the credit mix. ... Consider working with a credit repair service to develop a strategy for improving credit and preparing for a future mortgage application," advises Parangi.
You can also improve your financial position by paying down your debt and saving for a down payment. Consider getting a co-signer to boost your approval chances.
Apply for loans with lower credit score requirements than conventional loans, which require a score of 620 or higher. For example, VA loans don't have a set minimum credit score, and FHA loans require a score of at least 500.
When you're ready to look for homes, work with an experienced buyer's agent who can help you find the right home within your budget.
Don't let a past eviction keep you from buying a home.
A top agent will help you weigh your options.
How to avoid an eviction
"The best way to handle [an eviction] is up front, prior to the late payment. Tenants should contact their landlord prior to the rent due date and explain the hardship in an attempt to work out a solution," says Doug Perry, Strategic Financing Advisor at Real Estate Bees.
If you’ve already received an eviction notice, try talking with your landlord and making a written agreement to bring your rent current.
Evictions can cost landlords thousands of dollars. Many might be willing to just accept the keys and a small payment to let you out of your lease because it saves them money. Always try to communicate and negotiate with your landlord to keep an eviction off your record.
If the eviction goes to court, you can defend yourself or pay a lawyer to do so. You can visit the Legal Services Corporation, a non-profit website specializing in civil cases, to try to find a legal aid clinic in your area.
FAQ
Do bankruptcies clear evictions?
No, a bankruptcy won’t clear an eviction from your record. Bankruptcy doesn’t remove past negative information on your credit report. It merely re-negotiates old debt or removes an obligation to pay it.
How can I check if I have evictions?
Evictions show up on a rental history background check. Many websites will run your report for a small fee. However, it can take a while for recent evictions to appear, about 30–60 days after an issued judgment.
Can I get an FHA loan with an eviction?
Yes, you can get an FHA loan with an eviction on your record if the eviction happened 1–2 years ago.
