Will breaking a lease damage my credit score? [closed]

Question

I have to break my lease to move out of state. The landlord is telling me I will damage my credit and will not be able to rent another apartment for approx 7 years. Is this true?

Answer 1

Breaking a lease doesn't directly affect your credit status. It can result in a bad recommendation from the landlord, in case a potential new landlord contacts your former landlord. The connection to credit ratings is that breaking a lease might leave you with an unpaid debt. If you just walk away from the lease and end up owing $4K unpaid rent, the landlord is likely to turn this over to a collection agency, and that is what results in a hit on your rating. Experian, one of the credit score companies, has advice on how to avoid such problems (mostly, pay your debts).

Answer 2

united-states

Quite possibly, yes. Depending on the terms of the lease you signed, you could be liable for the rent for the remainder of your lease term. If you stop paying the rent, your landlord can report this debt to credit bureaus as a delinquent debt (i.e., money that is owed but has not been paid on time.) Such debts do indeed stay on your credit report for seven years; and even if you pay them off, they might still show up as having been delinquent for some period of time. And if you try to rent an apartment from a landlord who runs a credit check on you, they might think twice about renting to you once they know that you broke a lease in the past.

That's just the broad picture, though. There are many different possibilities in situations like this that could change your calculations.

• Your lease might contain a clause concerning whether the lease can be ended early if you pay a fee.
• Depending on state or local law, your landlord may have a duty to mitigate the debt you owe. If that's the case, then your landlord has to try to re-rent the property to someone else; and you would only owe the rent for the amount of time the property was vacant, not the entire remainder of your lease term.
• Similarly, you may be able to sublet the property. If you can find someone to take over the remainder of the lease term, and the landlord still gets their money, then you won't owe anything.
• If you're "moving out of state" because you're a servicemember on active duty, you can break a lease with 30 days notice.
• Other state or local laws may also have a bearing on this situation.

So the best answer is to Google "[location] tenant union" and see what comes up. Depending on the location, you might be able to find more advice about what you are required to do and what the landlord is required to do when breaking a lease, and perhaps even offices you can call to get further advice.