Damaged credit can affect more than just getting a car loan or a mortgage. A low score can drive up insurance premiums and make it harder for you to get a good job. Missing or being late with loan or credit card payments can hurt your credit, and if a business to which you owe money turns your account over to a collection agency, that can show up on your credit report, too. Typically, unpaid rent won't hurt your credit score except in a few specific situations because landlords don't routinely report to the credit bureaus.
Collections and Civil Judgments
If you move out of your apartment and you still owe your landlord rent, he can seize your security deposit against what you owe. If there’s still an unpaid balance afterward, he might choose to turn your account over to a collection agency. Alternatively -- or in addition, if the collection agency couldn't resolve the debt -- he may choose to sue you for the remaining amount. If he wins the case, then the court issues a judgment against you for what you owe. Both collections and civil judgments show up on your credit report and remain there for at least seven years.
Even if your landlord never sues you for late rent, not paying on time can have other consequences. When you decide to move into another apartment, your new landlord might want to contact your previous landlord to find out what type of tenant you were. Having a reputation for being late with your rent hurts your chances of finding another place to live.
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