Property owners often face a difficult decision: should they report an eviction? Is going through the reporting process worth the trouble? Especially after they’ve battled to recover unpaid rent and fees?
Many landlords opt to avoid contacting the four major credit bureaus. Often, that’s because of time constraints. Sometime, landlords are uncertain about how reporting credit will affect a former tenant’s credit score. However, it is important for property owners to report evictions to the credit bureaus to protect themselves and future landlords.
Warn Potential Landlords to Avoid Risky Tenants
TransUnion reports that evicted tenants are three times more likely to have past eviction records or unpaid rental-related debts that have gone into collections. Property owners who rent their homes, apartments or commercial space can warn other property owners to be wary of risky tenants by reporting evictions to the credit bureaus. Potential landlords of your evicted tenants will appreciate the information, and you can improve the chances that other landlords will feel compelled to report similar information to credit bureaus to help protect you and other property owners in the future.
Gain Leverage in Case of Litigation
Evicted tenants may seek retaliation by taking a property owner to court over their eviction. When you opt to report evictions to the credit bureaus, you create a clear record of a tenant’s failure to pay rent. If a tenant chooses to take legal action against you after an eviction, you can point to the events leading up to the eviction and provide records that support the fact that the tenant has failed to pay over a period of time.
Attract Better Tenants
Evictions stay on a credit report for seven years. This makes it more difficult for a person to find a rental. If tenants know that you are serious about reporting evictions, they may be less likely to apply for your rental. This is especially true for tenants who are more likely to fall behind on payments and face eviction. While you should still be screening potential tenants, reporting evictions can help you weed out some of the more risky tenants.
Strengthen Your Collection Efforts
Landlords have the right to sue tenants for nonpayment of rent or fees. If your tenants were evicted because they owe back rent or compensation for property damage, reporting an eviction can help support your collection efforts moving forward. The record of the amount owed and the length that the debt has gone unpaid will help if you choose to take tenants back to court or hire a collections firm to assist with the process.
How to Report an Eviction
Landlords may be hesitant to take the next step because they do not know how to report an eviction. With court-ordered evictions, the courts may add the eviction to a credit report as a public record. Sometimes a collection agency will add the unpaid debt to a tenant’s credit report. The credit bureaus can list property owners as a creditor in the case of unpaid rental debts. Be sure to report eviction information to all three credit bureaus. This ensures that the resulting credit reports will accurately reflect the eviction and any unpaid debts.
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