When tenants become delinquent, their record of payments can be reported to one or several credit reporting agencies. For a landlord to report you, your delinquency must have reached a certain level. This information can have a negative impact on your credit report.
Credit Reporting
When a landlord evicts you, the chances are that you have an unpaid balance. If you decide not to pay, the landlord will turn your outstanding balance over to a collection agency. The collection agency will report you as a charged-off account to a credit reporting agency. Charged-off accounts are accounts that the landlord has deemed to be uncollectible or has written off as a loss to the company.
Credit Reporting Agencies
A debt collector will report your information to a credit reporting agency. The three major reporting agencies are TransUnion, Equifax and Experian. Your damaging credit information could be reported to all three agencies or one or two of them. To get a free copy of your credit report from all three agencies, contact www.annualcreditreport.com. You may be able to view your report online or you can have copies mailed to your current address.
Credit Score
Charged-off accounts are reported on your credit file for a period of seven years. If you decide to pay off the account, it will show up on your credit file as a paid charged-off account. This information can lower your credit score. A credit score is used by lenders and those who extend credit to help determine who is likely to default on a loan. Credit scores range from 300 to 850. If your score is lowered substantially, you could be rejected for credit in the future or pay higher interest rates.
Negotiate
When the collection agency contacts you about payment, you may be able to negotiate the repayment of the debt, as well as your credit rating. Sometimes you are able to get the collection agency to agree to remove the damaging information from your credit file once you have paid the debt in full. The agency may or may not agree to negotiate with you. If it agrees to remove the information from your file, make sure you get the agreement in writing.
Dispute
If the damaging information does not drop off your credit file after seven years, you can send a letter of dispute to the credit reporting agency where the information appears. The credit reporting agency will contact the landlord to resolve the issue. The information will be taken off your credit report.
Leasing
Damaging information on your credit file will make it difficult to find a landlord willing to accept you as a tenant in the future.
0 comments:
Post a Comment