If you’ve fallen behind with your rent payments or are facing eviction for another reason, find out how it could affect your credit score and what you can do to prevent any negative impact.
How can an eviction affect your credit?
No matter whether you’re being evicted because your landlord is selling your home, you’ve fallen behind with your rental payments, or for no reason at all, it shouldn’t directly affect your credit score. An eviction won’t usually be reported to the UK’s three credit reference agencies but can form part of your rental history instead. Your rental history can affect your ability to find another property, but your credit score won’t be impacted.
It’s also worth remembering that if you do make your rental payments on time throughout your lease this could have a positive impact on your credit.
However, there are two ways that an eviction can indirectly affect your credit score, especially if you’ve fallen into rent arrears:
Debt collection
If you’ve found it difficult to cover your rent payments and have been evicted for being in arrears, your debt might be marked on your credit report if it’s reported as a default and sent to a collection agency. A default like this can stay on your credit report and affect your credit score for up to six years.
County Court Judgement (CCJ)
In some instances, your landlord might decide to take you to court to recover unpaid rent after you’ve been evicted. They can apply for a money judgement or money order, which is also known as a County Court Judgement (CCJ). If a CCJ is granted against you, it’ll be marked on your credit report for up to six years and can make it difficult for you to secure finance in the future.
But the good news is that you can prevent a CCJ if you act as soon as you receive a Letter of Claim. This is the first step in the CCJ process and, once you receive your letter, you’ll have 30 days to reply, and you can use this time to negotiate a repayment plan with your ex-landlord and avoid court action altogether.
When can you be evicted?
In the UK, if you have an assured shorthold tenancy for a fixed term or with a rolling contract, your landlord can choose to evict you under a Section 21 or Section 8 notice. While the landlord’s rights depend on certain circumstances being fulfilled, a Section 21 typically applies after your fixed term ends while a Section 8 can only be used if you’ve broken the terms of your tenancy.
With a Section 21, you must be given at least two months’ written notice to leave and with a Section 8, you must be given at least two weeks (depending on the terms you’ve broken).
If you don’t leave on the date specified and still owe your landlord rent, they can apply to the court for a possession order. This order isn’t the same as a CCJ and won’t automatically impact your credit score.
Once the possession order date arrives (and if you still don’t move out), the landlord can seek a warrant of eviction, which will allow them to appoint bailiffs to come and evict you.
What should I do if I can’t pay my rent?
There are many reasons why you might be struggling to pay your rent; perhaps you’ve lost your job, your bills have increased, your partner has moved out, or you’ve had to cover unexpected costs. If you’re starting to fall behind – or worried you won’t be able to pay your rent on time – contact your landlord as soon as possible.
Rather than deal with the hassle of evicting you, your landlord might be willing to work with you to agree a modified payment plan or offer a short payment break until you can get back on track. If you do reach a compromise, make sure that you get a copy of this agreement in writing, just in case.
If you can’t make a new payment agreement with your landlord, they might still be willing to let you exit the lease early rather than evicting you. If you take this option, it won’t show on your credit report and won’t be listed as an eviction on your rental history.
Facing an eviction? Our team of experts is here to help you navigate the next steps. Give us a call on 0161 660 0411 or send a message here
