General Question

kneesox's avatar

If a person signs a lease and then breaks it, does it hurt their credit?

Asked by kneesox (4593points) November 23rd, 2021

If the person decides to move out before the lease period is up, what happens to their credit record?

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7 Answers

elbanditoroso's avatar

Generally, yes, because you have a signed contract (the lease) and are not paying what is owed; you are breaking the contract.

With rents, there are additional factors—livability of the property, whether the heat and water are working, etc.—that may let you off the hook. And some states / cities may have specific rules.

Remember that many owners and landlords run credit checks. Skipping out on a lease hurts your chances of renting in the future.

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kneesox's avatar

@elbanditoroso, thank you. So if there were issues like cleanliness that meant it was not ready to live in, how would the person get that taken into consideration? If their credit rating went down, how would they let the agency know about the problem? How do they get let off the hook?

Also if the lease says that the landlord could keep the security deposit in that case, and they do, isn’t that penalty enough? It seems like that should clear the slate.

JLeslie's avatar

If the landlord reports you to the credit bureaus it will hurt your credit.

Regarding using the security deposit to fix something. It’s again a matter of whether the landlord bothers to report not being paid. If everything is paid then they aren’t likely to report, but they are still a reference for you on an application. When you apply for an apartment you usually write where you have been living the last two years or more.

You can write the credit bureaus and dispute something on your credit if it is incorrect or you have a good explanation for why you didn’t pay.

Blackwater_Park's avatar

Many landlords have a clause for you when you bust a lease. You’ll have to pay X amount to get out of it. That won’t hurt your credit, it’s part of the arrangement.

jca2's avatar

Some landlords will let you out of a lease without argument if you agree to help get a new tenant for them.

elbanditoroso's avatar

Yes, but…

there’s a huge difference in behavior between mom and pop landlords who might own a property or two, but that’s all – and corporate landlords that own 200+ suite apartment buildings and run their properties like a corporation.

Having lived in both at different points in my life, there are advantages and disadvantages to each. I would expect the ‘corporate landlords’ to be much more stringent.

King_Galaxius's avatar

I have heard that it does, however I have found that this is not always true. I rented a house years ago while enrolled in college. However, I needed to live closer to school, because I lost my job and an under age illegal alien hit my car and totaled it out.
As a result, I had to live with a classmate. My landlord’s wife excused this because of my dilemma. Additionally, years ago my mom signed for my baby sister an apartment so that my eldest niece to stay with her (because of family problems). However, my baby sister had a troublesome boyfriend move in and my sister would not listen regarding letting this troublesome man live with her. As a result, the apartment office made an exception for my mom. It was a mess, but it was not put on my mom’s rental history. My mom has always had an exceptional rental history on her own.

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