Breaking a lease in any state has the potential to damage your credit in any state, even in Georgia. Whether a lease goes on your credit report depends on the type of property that you lease and how you break it. You may be able to legally break a lease, meaning the creditor cannot come after you for rent or report it to the credit bureaus.
What Type of Lease is It?
Your credit report follows you around wherever you live, because three major credit reporting bureaus handle the majority of consumer credit reporting in the United States. The type of lease you have has an impact on whether the lender can even report it to the national credit bureaus. Auto dealers usually report leases to the credit reporting agencies, so breaking it almost always negatively affects your credit report. Apartment leases, rarely appear on a credit report, because most landlords cannot afford to subscribe to the national credit bureaus and do not have enough accounts to qualify as a creditor for the national reporting bureaus. However, one of the major credit reporting bureaus in the United States, Experian, lists leases on credit reports if the landlord reports to the rental history agency RentBureau.
Considerations
A creditor or lessor may be able to damage your credit even if it cannot directly report your lease violation to the credit bureaus. If the creditor files a lawsuit, for instance, the credit bureaus probably will report to outcome eventually, because they scour public databases for civil judgments. Alternatively, if the creditor sells the debt, the debt collector may report the account to the credit bureaus. Both are significant negative events in your credit history.
Breaking a Lease Legally
Look at the details of your contact for ways to break the lease legally. Many landlords allow you to terminate the lease for a fee, which might include the remaining rent on the lease and cleanup costs. You always have the option of trading the lease with someone else, such as when both parties want to swap cars, or a sublease agreement in the case of an apartment. In Georgia, the landlord must keep the dwelling up to code and perform any services promised in the lease agreement. If the landlord violates any of these provisions, you might be able to break the lease without any consequences. However, you usually have to give a 30-day notice of your intent to vacate the property.
Tip
Breaking a lease without the landlord or creditor's consent is a risky option, so it is wiser and more responsible to ask the lessor how to terminate the lease. The lender may accept a small buyout if it means avoiding the hassles of evicting you or taking your property. You also want to avoid an eviction going on your tenant history. Landlords often report to companies that collect rental data. While rental histories rarely appear on a credit report, a poor tenant history report might prevent you from renting an apartment in the state of Georgia.
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