When you apply for an apartment rental, the rental agency or landlord will typically obtain a copy of your credit file as part of the application process. Negative entries on your credit file may cause the landlord or rental agency to deny your rental application. Judgments like bankruptcies and other financially related public records appear on your credit report, and credit bureaus monitor civil court filings for new public-record entries.
A civil judgment is typically a last resort for a creditor -- because filing a lawsuit against you for debt is expensive, creditors will usually exhaust all other collection efforts before suing you for debt. However, if you do not make an effort to bring a past-due account current, obtaining a judgment can be an effective strategy for forcing you to pay your debt. A judgment can have several negative effects, including the impairment of your ability to rent an apartment.
Paying Off Judgment
After you pay off a judgment, the judgment creditor must notify the court that the judgment has been satisfied, typically within 30 days. The court will then update your public records file to reflect payment of the judgment amount. The judgment also will appear on your credit report as paid. Although paying a judgment does not negate the effect on your creditworthiness, a landlord or rental agency may be more willing to rent you an apartment if you have paid the judgment debt.
Length of Effect
A judgment will stay on your credit report for seven years regardless of whether you pay off the judgment in less than seven years. However, state laws vary regarding the length of time that judgments stay on your public record. A prospective landlord may access public records in addition to obtaining your credit file -- if your state's laws permit a judgment to remain public record for more than seven years, a judgment can continue to affect your ability to rent an apartment even after it has been erased from your credit file.
Avoiding a Judgment
Because you can do little to mitigate the effect of a civil judgment, avoiding a judgment is the most effective strategy for maximizing your ability to rent an apartment. If you have fallen behind on a debt, contact your creditor and ask about alternative solutions to bring your account current. Your creditor may allow you to temporarily postpone payments or pay your past-due amount over time. Although past-due payments can still affect your credit, they typically have a less severe effect than a judgment.
- "Your Credit Score"; Liz Pulliam Weston"; 2007
- "Anatomy of Credit Scores"; Doug Minor; 2010