A credit report is a key document in your financial history that most lenders will look at before agreeing to loan you money. Not only can your credit report impact your finances directly, but it can also impact your ability to rent or buy a home.
So, do evictions and other renters’ issues end up on your credit report? Fortunately, evictions won’t affect your credit score — but other important factors will. Read on to learn more about what can affect your credit score.
What is a credit report? Understanding the basics
A credit report is an important tool for tracking and monitoring your financial history. It is essentially a snapshot of an individual’s credit activity. A credit report gives insight into things like payment history, overall credit utilization, and the number of credit accounts that someone has.
There are a few different credit bureaus that monitor an individual’s credit. These credit bureaus are Equifax, Experian, and TransUnion. Each credit bureau calculates your credit score a little differently, but they’re all generally good indicators of your credit health.
These bureaus may send your credit report to banks, lenders, credit card companies, mortgage lenders, auto lenders, and even landlords to help them determine your financial well-being. Because of its widespread use, your credit report is one of the most important financial documents you’ll ever have.
By reviewing this information regularly, individuals can work on improving their overall financial health. Additionally, by taking a proactive approach to better understand their report, individuals are better equipped to make wise financial decisions.
Knowing your credit report can help you stay ahead of any potential financial issues. It can also help you take advantage of financial opportunities that may come up.
What are all the elements included in your credit reports?
There are four basic components of your credit report, each containing important information about you and your financial history. Here is a brief breakdown of these four main categories.
Personally identifiable information
The Personally Identifiable Information, or PII, section is the first and most basic element of your credit report. It provides identifying information about yourself, such as name, address, social security number, and date of birth. This allows lenders to verify who you are and link together multiple sources of financial data.
Understanding the PII section can help ensure that your credit information is correct when seeking a loan or any other form of credit. To correctly manage your PII section, make sure all of your details are correct and up-to-date.
Credit accounts
The credit accounts section of your credit report is an invaluable source of information regarding your financial history and current status. It contains a detailed record of all open or closed accounts, including newly opened and those recently paid off.
This section also showcases any problem accounts, late payments, charge-offs, foreclosures, bankruptcies, and other negative items. This section offers a fascinating insight into your overall creditworthiness and lets potential lenders know how reliable you have been with managing money in the past.
Credit inquiries
Credit inquiries are an important section of your credit report that you should generally keep an eye on. This section contains records of businesses and organizations that have performed hard credit checks on your credit report, along with the date of the inquiry.
This section can affect your credit score because it shows potential lenders whether you’ve applied for other forms of credit recently. Too many inquiries in a short period could signify to lenders that you might be in financial distress or are taking on more debt than you can afford.
Staying on top of what’s listed under this section can help you protect your credit health, so take a few minutes every so often to keep track of these inquiries!
Public records and collections
The public records and collections section of your credit report contains a range of public information that may affect your credit score.
This includes any bankruptcies you may have declared, court judgments against you, liens, wage garnishments, or delinquent child support payments. In addition to these major categories, different kinds of tax liens and other debts you may owe can also be found here.
While having negative entries in this section is never ideal, it is possible to improve this section’s effect on your score by paying off these balances in full and consistently practicing good spending habits.
Together, these four elements make up your credit report, which lenders, the government, and potential landlords may view before agreeing to a contract with you.
Do evictions go on your credit report?
When dealing with housing challenges, one of the first concerns that may come to mind is the potential impact on credit. You may wonder if an eviction will affect your credit report — luckily, the answer is no.
Evictions are not included in your credit report or history because they represent a legal dispute between you and your landlord rather than an indication of financial responsibility or payment habits. Therefore, while avoiding evictions altogether is still wise, you can have peace of mind knowing that no evictions will show up on your credit report.
What else goes on your credit report?
While evictions may not appear on your credit report, there are several other items in the public record that can and will appear on your credit report. Here is a brief look at a few of those items.
Bankruptcy filings
Bankruptcy can be a difficult and stressful thing to experience, but it doesn’t have to linger on your credit report forever.
The type of bankruptcy you file affects the length of time it appears on your credit report. For example, a Chapter 7 bankruptcy will stay for 10 years, while Chapter 13 is only visible for seven years from the filing date.
During these times, it’s essential to maintain good financial habits and engage in repairing your credit to minimize the impact. This can help you reach positive credit milestones by the time the bankruptcies come off your report.
Debts in collections
Having debts in collections appear on your credit report can be disheartening, and it can be difficult to know where to start repairing your credit. On the bright side, you have the opportunity to take proactive steps toward improving your credit by addressing these debts.
It’s important to review your report, understand what damage has already been done, and come up with a plan of action that gets you back in control of your financial health. Taking proactive steps can not only protect your financial well-being but can also help improve how creditors will view you in the future.
How do you fix an error on your credit report?
Taking steps toward correcting inaccuracies on your credit report can be an intimidating process, but it is often necessary to keep your finances in order. The most important first step is to identify where the error lies.
Carefully review the accuracy and completeness of each report and then reach out to the relevant authorities. You can even dispute the charges if necessary.
Often, a simple letter or email to the credit bureau can resolve the issue quickly and efficiently. If needed, you can also dispute any errors with the reporting agency or other creditors by providing documents that solidify your side of the story.
Evictions and your credit: wrap-up
Evictions are serious events that can impact your ability to rent in the future. Fortunately, you don’t have to worry about evictions showing up on your credit report.
Your credit report does not include evictions, but it does contain other sensitive information, including bankruptcies and debts in collections. Thankfully, the majority of your credit report is made up of other information like your credit accounts, balances, the age of your accounts, and the history of your payments.
There are all sorts of ways to build credit, but having and using a credit card responsibly is generally one of the most important things you can do for your financial health. Why not use a credit card that rewards you for smart habits?
Vital Card is a credit card that rewards you for sharing and spending responsibly with an innovative approach to cashback rewards. Check out everything you need to know about Vital Card today!
Sources
Credit Report Basics | Experian
Will an eviction notice show up on my credit report? | PrivacyRights.org
Disputing Errors on Your Credit Reports | FTC Consumer Advice
Vital Card blog posts are intended for informational purposes only and should not be considered financial or any other type of advice.