Does Owing Money to an Apartment Affect Your Credit?

Owing money to an apartment complex can have many adverse effects. An unpaid debt to an apartment owner can have a negative effect on your credit score, lead to a court judgment against you or get you evicted. As in all cases with debt, your best move is to pay the debt or to avoid acquiring it in the first place.

Causes of Apartment Debt

There are a few ways to end up owing money to an apartment complex. You could owe the apartment complex for unpaid rent. You might have broken the lease and moved out for reasons beyond your control, but in these cases, you still owe money for the apartment you agreed to lease. Another situation that could create debt is damaging the apartment property. If you cause more expense in damages than covered by your security deposit, you will owe money for them.

Your Rights from Notification

A landlord has to provide written notification of the money you owe. You have 30 days from the date he provides the notification to arrange payment for the debt. You can respond to the notification by offering payment, disputing the debt claim or requesting an arrangement to make payments. If you do not respond to the notification, your landlord can have a judgment filed against you; this can result in wage garnishment or eviction if you are still living on the premises. A judgment will show in public records when anyone checks your credit score or performs a background check on you.

Your Credit Score

There are a few ways owing money for an apartment could harm your credit score. Anytime a company checks your credit rating, it can harm your score. There are two types of credit checks, a hard pull and a soft pull. A hard pull is only performed by permission, stays on your credit report and harms your score. Soft pulls appear on your credit report, but do not affect your score. According to Bankrate.com, apartments usually use hard pulls when considering new tenants. According to the Tulsa World, timely or untimely rent payments affect your credit score.

Other Harmful Effects

Landlords will usually perform credit and background checks for potential tenants. An eviction or judgment against you in the past will appear on a background check. So not only will unpaid rent harm your credit score, it can harm your chances of getting into another lease.