Did you know that, in certain cases, an eviction can impact your credit? You’ll never find an eviction listed on your credit report under that name, though. Instead, the actions that your landlord takes when evicting you could appear on your credit report.
For example, if the landlord goes to a collection agency to collect the rent owing, an entry for a collection account could appear on your credit report. Likewise, an entry for a judgment could appear on your credit report if your landlord took you to court to collect unpaid rent.
Entries for collection agencies and judgment usually appear under the public records section of your credit report.
A false eviction notice made by your landlord could result in an incorrect judgment or collection appearing on your credit report, damaging your credit. If your landlord has issued an incorrect or false eviction notice, here are the steps you can take to have the information removed from your credit report:
Get a copy of your credit report
Contact the credit bureaus
Send a dispute letter
Provide evidence
Play the waiting game
Follow up as needed
As soon as you find out that your landlord has issued a false eviction notice, you’ll want to request a copy of your credit report to see how it appears. You can download your Equifax credit report for free by signing up for Borrowell.
Once you confirm that an action taken by your landlord appears on your credit report, such as an entry for a collection account, you’ll want to contact the credit bureaus to start the formal dispute procedure.
There are two major credit bureaus in Canada: Equifax and TransUnion. You’ll want to contact both of them, as it’s possible the collection account could appear on one, but not the other. Each bureau has a slightly different dispute process, so be sure to take a look at how to file a formal dispute with each one.
While it’s nice to say that information that appears on your credit report is incorrect, you’ll need to provide evidence to back up. Providing evidence helps speed up the process and can greatly improve your chances of having the information in question removed from your credit report in a timely manner.
Bank and credit card statements are a good place to start. If you can show that you did pay the rent amount owing, the case could be resolved right then and there.
Credit bureaus can receive a lot of disputes, so it’s important to be patient while the credit bureaus are investigating. You shouldn’t expect a response for at least 30 days.
If the credit bureaus are in agreement with your dispute, the inaccurate or erroneous information should be removed from your credit report. If the credit bureaus disagree, you should receive an explanation from them. If more information is required, the credit bureaus should request the necessary supporting documentations from you.
If you haven’t received a response within 30 to 60 days, it’s a good idea to follow up with the credit bureaus directly on the status of your dispute. This helps ensure it is being worked on and hasn’t been misplaced.
An eviction on its own may not affect your credit. However, if an entry for a collection agency or judgment appears on your credit report, it will certainly affect your credit.
Your credit score impacts your rental chances, but having an eviction entry on your credit report makes it even more difficult for you to rent a new place. If your last landlord doesn’t like you, you could always leave them off your rental application as a reference. However, if there’s an entry for an eviction, you’ll need to explain it to any new landlord you’re hoping to rent a place from. Landlords will be hesitant to rent to you unless you have a good reason for not paying the rent at your last place.
This may mean that your rental application may get turned down, or you may end up having to pay more in rent to compensate for the lower credit score. Not to mention, you’ll have a smaller pool of rental places to choose from, which may mean renting in a less desirable location. This can make things very difficult for you, especially if you're a student looking for a rental.
An eviction can also affect your ability to borrow money. It could mean paying higher interest rates on auto loans and unsecured lines of credits, or being turned down altogether. If your hope is to own a home one day, it could mean paying a higher mortgage rate.
In most provinces and territories, eviction information and related records will stay on your credit report for seven years. This means that it could be difficult and more costly to rent a new place or borrow money for those seven years that it appears.
The length of time that negative information stays on your credit report depends on the province or territory in which you live.
There shouldn’t be a deadline for filing an eviction dispute claim. However, the longer you wait to file dispute claims with the credit bureaus, the more difficult it could be to win your case. That’s because you may no longer be able to access the records necessary to win the case.
For example, if you need to show bank or credit card statements to prove that you paid your rent 24 months ago, but your bank or credit card statements online only go back 12 months, you might be out of luck.
Likewise, the credit bureaus may question why you waited so long to file a dispute. It might be because you didn’t notice the incorrect or erroneous information until later on. That may be the truth, but waiting a long time to file a dispute sure doesn’t help your case.
When filing a dispute, you should still check with Equifax and TransUnion to see if there are any important deadlines to be aware of. If the credit bureaus request supporting documentation and you don’t provide it, your dispute could automatically be closed after 30 or 60 days for failing to respond.
Yes, you should be able to stop an eviction once it’s filed. However, you’ll need a good reason to stop it.
The easiest way to stop it is by speaking to your landlord and trying to resolve the issue that led to the eviction in the first place. However, if that fails and you’re not able to work something out, that’s when you’ll need to take further action.
The action you’ll need to take depends on the steps your landlord takes. For example, if your landlord sends the debt owing to a collection agency, you can provide supporting documentation to the collection agency as proof that the debt has been paid and stop them from contacting you.
If a landlord has taken you to court, you can fight it by proving that you’ve paid the rent owing. If the eviction is related to another reason besides unpaid rent, you can also prove that the landlord’s reason for eviction is invalid or illegal and it’s a false eviction.
The landlord is required to follow specific steps to evict a tenant. However, if a crucial step is missed, it could mean that the eviction isn’t allowed to proceed until that step takes place.
If you can prove there’s no legal basis for the eviction and that you didn’t breach the rental agreement, you’ll have a much better chance of winning the case.
As a tenant you have a right to dispute any false evictions. However, there are valid reasons your landlord can evict you. Here are some of the most common valid reasons for eviction:
Failure to pay rent
Violations to the rental agreement
Property damage
Infringements against health and safety
Not leaving the premises after the lease expired
This is perhaps the most common reason. This is when the tenant is late on the rent or refuses to pay the rent. Tenants may feel that they are justified in withholding the rent for one reason or another, but the courts may rule otherwise.
Common violations to a rental agreement include people moving in without the landlord’s permission, owning pets or specific types of pets (like exotic ones), and subleasing the rental unit without the landlord’s permission.
Damaging the rental unit on purpose or by accident can lead to you being evicted from the unit, especially if the tenant refuses to cover damages that are her or his fault.
The tenant is required to regularly clean the rental unit. Failure to do that can result in infringements against health and safety.
Not leaving the premises of the rental unit once the lease expires can be grounds for eviction, provided the landlord has a valid reason. A landlord can’t just ask a tenant to leave because the landlord doesn’t like the tenant. There has to be a legal reason, such as moving into the unit her or himself.
You shouldn’t have to pay anything to file a dispute directly with the credit bureaus. Filing a dispute should be free, as it’s your right to file a dispute if you see anything that you believe is wrong on your credit report.
There may be fees from your bank for supporting documentation, such as retrieving old bank or credit card statements.
If you have a recorded eviction on your credit report, it may make it harder to find a place to rent. When looking for a place to rent, here are some steps you should consider when working with potential landlords:
Be honest with the new landlord
Offer references
Offer to pay more up front
Get a co-signer
Watch your credit
Show you can afford the rent
Honesty is the best policy, as the saying goes. It’s best to be honest with the new landlord about the eviction and provide a valid explanation.
You could provide personal and work references to prove to any prospective landlords that you’re a responsible tenant, and that it was just a one-off incident.
By offering to pay a large deposit up front, it can show a prospective landlord that you’re in a better financial situation and will pay the rent on time.
A co-signer, such as your parents, can provide your landlord reassurance that you have every intention of paying the rent on time.
By knowing how an eviction shows up on your credit report, you can be better prepared to discuss it with prospective landlords.
By providing a recent letter of employment and pay stubs, along with bank statements and a budget, you can show the new landlord that you can indeed afford to rent the place.
By getting ahead of things and disputing any false evictions ahead of time, you can help ensure any erroneous information is removed from the public record section of your credit report in a timely manner, so it doesn’t limit your ability to rent another place.
Sean Cooper is the bestselling author of the book, Burn Your Mortgage. He bought his first house when he was only 27 in Toronto and paid off his mortgage in just 3 years by age 30. An in-demand Personal Finance Journalist, Money Coach and Speaker, his articles and blogs have been featured in publications such as the Toronto Star, Globe and Mail, Financial Post and MoneySense.
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