What Happens if I Miss a Rent Payment?

Missing a rent payment can have several consequences, depending on your lease agreement and state laws. Typically, lease agreements include penalties for late payments, and you may or may not have a grace period to pay the overdue amount. If you miss a rent payment, you are in breach of your lease agreement, which could lead to eviction. Additionally, your landlord might report the late payment to credit bureaus, potentially damaging your credit score.

Do Late Rent Payments Affect Credit?

While on-time rent payments don’t usually help build your credit score, missing a payment can harm it, especially if the payment remains delinquent for an extended period. Here are some ways late rent payments can affect your credit:

• Landlord Reporting: If your rent is unpaid for 30 or more days, your landlord or rent payment service might report the late payment to one or more credit bureaus.
• Debt Collection: If your landlord cannot collect the debt, they may sell it to a collection agency, which will report the debt to the credit bureaus.

Both scenarios can significantly impact your credit score, with collection accounts causing more damage as they indicate prolonged delinquency. Negative items can remain on your credit reports for up to seven years.

How to Find Out if Your Rent Is Being Reported

If you’re concerned about how a late rent payment could impact your credit score or want to know if your on-time payments are helping your credit, follow these steps:

1. Review Your Lease Agreement: Look for clauses indicating that your landlord may report payments, including missed ones, to credit reporting agencies. Also, check for other potential consequences of missing a payment.
2. Ask Your Landlord: Contact your landlord or property manager to inquire about their policy regarding late payments and credit reporting. Individual landlords are less likely to report to credit bureaus, but property management companies or rent payment services might.
3. Check Your Credit Report: Register with Experian to get a free credit report and review your history for rent payments. You can also obtain TransUnion and Equifax reports through AnnualCreditReport.com.

If your on-time rent payments aren’t being reported, consider signing up for Experian Boost® to see if they’re eligible. Experian Boost allows you to add eligible positive rent, utility, and streaming service payments to your Experian credit report, potentially increasing your FICO® Score.

The Bottom Line

Unlike mortgage payments, rent payments aren’t always reported to credit reporting agencies. While this means positive rental history may not improve your credit, a missed rent payment is less likely to damage your credit score. However, late rent payments can hurt your credit if your landlord reports them or sells your debt to a collection agency.

To prevent this, contact your landlord if you can’t make rent and ask about relief options. You can also seek financial assistance for rent or other necessary expenses. Regardless of whether your landlord reports late rent payments, monitor your credit regularly to understand how your actions impact your credit score.

Contact O1ne Mortgage for Your Mortgage Needs

At O1ne Mortgage, we understand the importance of maintaining a good credit score. If you’re looking for mortgage services, our team of experts is here to help. Call us at 213-732-3074 for any mortgage service needs. Let us assist you in securing the best mortgage options tailored to your financial situation.