If you’re one of the 3.1 million Americans who fear displacement within the next few months since the federal eviction moratorium ended, you may also be worried about the long-term ramifications of not paying rent.
You could be wondering if an eviction could hurt your credit score. After all, most people understand that missed credit card and loan payments lower your credit score. On-time payments account for 35% of your total FICO credit score, so missing even one payment can drastically reduce your score, as can loan defaults and accounts in collection.
But here’s the good news: As long as your landlord doesn’t report rent payments to any of the three credit bureaus (Experian, TransUnion or Equifax), missed payments cannot hurt your score. And even if you missed so many rent payments that it ended in eviction, that also won’t be reflected in your credit score or on your credit reports.
Howard Dvorkin, CPA, chairman of Debt.com explains, “If you get evicted, your credit score won’t take a direct hit, but the glancing blow will still sink you.”
That’s because evictions go into public records, Dvoskin explains. “Many landlords now do background checks on their potential tenants,” he says. “Good luck getting that affordable lease if your new landlord finds that eviction judgment.”
Likewise, if you were ordered by a court to pay back rent and your landlord then sent the debt into collections, it will get reported to the credit bureaus by the collection agencies. And that will lower your credit score by showing up as a past due account in collections.
If you’re facing eviction, your best course of action may be to seek help through the federal Emergency Rental Assistance program. You can also speak to your landlord to work out a payment plan that will keep you in your apartment while making your payments more manageable for your budget.
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This article originally appeared on GOBankingRates.com: An Eviction Could Hurt Your Credit – Can You Minimize the Damage?