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EVICTIONS - How they hurt Scores & How to remove them

By: Daniel Rosen October 11, 2022

An eviction tidal wave is about to crash into our economy, and Credit Heroes must prepare for it!

That's why on this week's Podcast, I explain why mass evictions are coming, how evictions affect people's credit, and how you can remove them!

 

According to the US Census Bureau, 3.8 million tenants will be evicted from their homes in September and October, and that's a lot of people having major post-pandemic financial hardship, so we are looking at a massive issue that our industry needs to fix right now. 

That's why today I'm going to explain why mass evictions are coming, how evictions affect people's credit, and how you can remove them! 

Have you ever been evicted or threatened with eviction? 

I've been evicted. It was terrible. It was embarrassing. I had to go to court and face my landlord, Mr. Akhavi, who was so mean. And he didn't evict me because I did anything wrong. No, I always paid my rent on time, and I was the perfect tenant. I left him alone, and I fixed stuff myself. But he evicted me because that allowed him to raise the rent. What a bastard!

We went to court. I paid for a lawyer, which was money I didn't have. 

I thought I had a great case. But he said all this terrible stuff about me that wasn't true. And I lost. They gave me a week to move, but I was leaving on the road for a gig two days later, so suddenly, I had 24 hours to pack everything and find a new place, or all my stuff would be thrown out. 

Getting evicted sucks! 

It's a horrible process for everyone involved, and it leaves the evicted person in the very difficult position of trying to find new housing with an eviction mark on their record.

On average, American landlords file 3.6 million eviction cases every year.

But this year, we are expecting to see 3.8 million evictions just in September and October alone!

And on top of that, the US Census Bureau also estimates that 8.5 million tenants are currently behind on their rent. 

So how did this happen? 

Well, the answer is complicated. But here are some of the reasons... 

Rents have skyrocketed - according to Zillow, rents have increased almost 25% since the pandemic began, and the majority of that increase happened in just the last 12 months. 

And this summer, the US median rent reached its highest level ever recorded: at $2,000 per month. That's a lot of money for the average person!

There's also an Affordable Housing Shortage - I call it an Affordable Housing Shortage because, according to the 2020 Census, nearly 10% of all homes are vacant, so the issue shouldn't be considered a "housing shortage" the way some politicians and news shows make it out to be. 

Whether landlords are unwilling or unable to lower rents, there are vacant properties, and there are plenty of people who can't afford to live in them. 

Current estimates show there are only 37 Affordable Rental Homes for every 100 low-income households. And with rents consistently rising, it's difficult to see this disparity getting any better. 

This brings us to the most impactful cause of all…

High Inflation and Low Wages - According to the National Low Income Housing Coalition, a worker has to earn $21.25 an hour to be able to afford a "modest" one-bedroom home. This means the average minimum wage worker has to work 79 hours a week to be able to live in a one-bedroom unit. That's insane, and it's not fair!

Here in California, the average minimum wage worker would have to work 83 hours a week to be able to afford a simple one-bedroom. 

I have a friend who works at the grocery store. And he saw my Credit Hero t-shirt one day, and he started asking me questions about his credit. So I gave him lots of advice to raise his score, and I've been checking in with him whenever I shop to see how his score is doing.

He doesn't know that I know, but he's actually living in a tent right around the corner from my house. I've seen him there by his tent when I walk to work. 

And this is a guy who has a full-time job, and still, he's living in a tent for at least the past year. 

And last week, when I saw him in the store, he said his credit was now over 700, and I said that's awesome. I'm so proud of you.  And he was excited because it should qualify him to get an apartment.  But he was still having trouble getting anyone to rent to him, even with that amazing credit score.  

This may be why, near my home in Venice Beach, tent cities are filling freeway underpasses, streets are lined with people living in their cars, and just last Sunday, a bunch of homeless people caused a fire at the construction site they were sleeping in that damaged several homes.

Thankfully no one was hurt, but the problem is everywhere, and there's no simple solution! But one thing is clear, skyrocketing rents and stagnant low wages are causing this disaster. 

The current federal minimum wage was last raised to $7.25 in 2009, and some economists are already saying that the proposal to raise the minimum wage to $15 an hour is still enough for people to survive. It's really bad out there for a majority of Americans. 

Here's the thing to remember…

Evictions are a complicated problem in the credit world, but we have to educate ourselves and our customers on how evictions impact credit, and we need to teach strategies for eviction recovery.

Now, I say it's complicated because evictions usually won't show up on credit reports at all, but they typically stay on public records for up to seven years. 

In other words, evictions don't directly affect credit reports, but credit can be impacted by the circumstances related to eviction.

Here's why this is important…

If someone is evicted for a reason other than non-payment of rent, like violating their lease agreement, their credit shouldn't be affected at all.

If someone is evicted because they didn't pay their rent and they have a collection account open, their credit reports will have a derogatory mark for that collection, and that can stay on their credit reports for up to 7 years. That collection account will negatively affect a credit score. 

Beyond credit reports, if a legal case is brought up to evict a tenant, that case file can be accessed indefinitely through court records.

It's also important to know that an eviction shouldn't make it more difficult to get financing for a new loan, but it could make it harder to get a new apartment to rent because Landlords use the Public Record Database to determine if someone has been evicted in the past. 

So, even though evictions don't technically affect credit reports directly, they still impact people's credit and have long-lasting consequences resulting in lower credit scores, higher interest rates, and marks on your public records that all contribute to making finding rental housing very difficult in the future. 

I haven't asked, but I bet that's why my friend is living in a tent. 

Here's what you need to know…

Of course, the best piece of advice is to avoid evictions altogether. With that being said…

If someone is evicted for any reason besides non-payment of rent, then their credit won't be affected. They will probably just need to explain their situation to their new landlord and expect to pay slightly higher rent.

If someone is being evicted for non-payment of rent and they're still in the eviction process, they should do everything in their power to fix the problem before going to court. Settle. Pay the back rent, work with the landlord and determine a mutually beneficial solution that doesn't involve the courts. 

I wish I had known that when I was evicted because that's on my record forever. 

Now, if someone has been wrongly evicted, they should consider pursuing legal action in court. If you or your clients would like to learn more, the CFPB lists Renter Protection Resources on its website. 

If someone was already evicted because of non-payment of rent and that debt went to collections, follow these FIVE steps to remove that from the credit report…

  1. Attempt to repay or settle the debt. Negotiate with the property manager, landlord, or collection agency, and determine a sum or payment plan. 
  2. Once the debt is settled or paid off, request any collections accounts be removed from their credit reports. 
  3. Ask to have the eviction records removed from their Tenant-Screening reports as a condition of repayment.
  4. Verify that the items related to the eviction have been removed from their credit report and Tenant-Screening report.
  5. Dispute any inaccuracies related to the eviction with the Credit Bureaus and Tenant-Screening Agencies.

If handled correctly, evictions can be avoided, but when circumstances cause them to be unavoidable, you can still ensure that the impact is minimal instead of devastating.

And my final point…

When people are evicted, they don't just lose a home. They lose the ability to easily find their next home.

Whether it's because of inflation, not enough affordable housing, or stagnant wages, no one should be forced to live in a tent, in their car, or on the street. 

As this eviction wave approaches, we have to be prepared to help a lot of people. 

I'll end by saying…

If you don't already have a Credit Repair Cloud account, check it out. It's the software that most Credit Repair businesses in America run on. Just sign up for a 30-Day Free Trial at CreditRepairCloud.com/freetrial

And if you'd like me to teach you how to grow your credit repair business, check out our Credit Hero Challenge!

Challenge-Stack-Mockup-Final

It's an amazing program, and we've got another challenge starting in a few days, so grab your spot right now at CreditHeroChallenge.com!

Until next time, remember

When you repair an eviction, you help someone find a home!

Keep changing lives!

Be sure to subscribe on your favorite platform below!

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Topics: Podcast

Transcript

Daniel Rosen  0:00  

Hey credit heroes. Today we're talking about evictions. An eviction tidal wave is about to crash into our economy and credit heroes need to prepare for it. That's why today I'm going to explain why mass evictions are coming how evictions affect people's credit, and how you can remove them. So you better stick around. So the big question is this, how can we take our passion for helping people with their credit and turn it into a successful business without taking loans without spending a fortune by bootstrapping it from nothing? So we can help the most people and still become highly profitable? That is the question, and this podcast will give you the answer. My name is Daniel Rosen, and welcome to credit repair business secrets. Okay, if this is your first time listening to my podcast, every week, I cover industry news, financial tips and entrepreneurial advice for bootstrapping your business from nothing. This show is the best how to guide for business owners and there is no other podcast like it, so be sure to click that subscribe button now and get ready to start changing lives. Okay, so according to the US Census Bureau, 3.8 million tenants will be evicted from their homes in September and October, that's last month and this month. And that's a whole lot of people having major post pandemic financial hardship. So we are looking at a massive issue that the industry needs to fix right now. That's why today I'm going to explain why mass evictions are coming how evictions affect people's credit and how you can remove them from credit reports. Now before we get started, this podcast is brought to you by credit hero score Grennan euroscore is the only credit monitoring service that integrates directly with credit repair cloud, get instant access to your credit reports and scores by signing up for a seven day trial for only $1 Sign up right now at credit hero score.com.

 

Okay, let's get into this. Have you ever been evicted or threatened with an eviction? Have you? I've been evicted. It was terrible. It was embarrassing. I had to go to court. And I had to face my landlord, Mr. Akagi, who was so mean, and he didn't evict me because I did anything wrong. No, I always paid my rent on time. And I was the perfect tenant. I left him alone and I fixed stuff myself. But he evicted me because that allowed him to raise the rent. What a bastard, right? We went to court, I paid for a lawyer, which was money I didn't have I was broke then. And I thought I had a great case. But he said all this terrible stuff about me that wasn't true. And I lost. And then they gave me a week to move. But I was leaving on the road for a gig two days later. So suddenly, I had 24 hours to pack everything and find a new place or all my stuff would be thrown out getting evicted. It sucks. It's a horrible process for everyone involved, and it leaves the evicted person in the very difficult position of trying to find new housing with a an eviction mark on their record. On the average American landlords file 3.6 million eviction cases every year. But this year, we're expecting to see 3.8 million evictions just during last month, and this month. Think about that. That's an awful lot of people being evicted. And on top of that, the US Census Bureau also estimates that 8.5 million tenants are currently behind on their rent right now. So how did this happen? Well, the answer is complicated. But here are some of the reasons rents have skyrocketed. According to Zillow, rents have increased almost 25% Since the pandemic began, and the majority of that increase, it happened in just the last 12 months. And this summer, the US average rent reached the highest level it's ever been at $2,000 a month and that is a whole lot of money for the average person. There is also an affordable housing shortage. Now I call it an affordable housing shortage because according to the 2020 census, nearly 10% of all homes are vacant. Think about that 10% of all homes are vacant. So the issue shouldn't really be considered a housing shortage. The way that some politicians and new shows make it out to be Now Oh, whether landlords are unwilling or unable to lower rents, there are vacant properties. And there are plenty of people who can't afford to live in them. Current estimates show that there are only 37 affordable rental homes for every 100 low income households. And with rents consistently rising, it's difficult to see this disparity getting any better. So that brings us to the most impactful cause of all, high inflation and low wages. According to the National Low Income Housing Coalition, a worker has to earn $21.25 an hour in order to be able to afford a modest one bedroom Hall. So think about that. That means the average minimum wage worker has to work 79 hours a week to be able to live in a one bedroom unit. And that is insane. And it's not fair. Here in California, the average minimum wage worker would have to work 83 hours a week to be able to afford a simple one bedroom apartment. Now, I have a friend who works at a grocery store. And he saw my credit hero t shirt one day, and he started asking me questions about his credit. So I gave him a lot of advice on how to raise his score. And I've been checking in with him whenever I shop to see how his score is doing. And he doesn't know that I know this. But he's actually living in a tent right now. He's living in a tent around the corner from my house. And I've seen him there by his tent when I walked to work. And this is a guy who has a full time job and yet, he's still living in a tent for at least the last year. And last week, when I saw him at the store, he told me he was really proud that his credit was now over 700. And I said, That's awesome. I'm so proud of you. And he was excited because he said it should qualify him to get an apartment, but he was still having trouble getting anyone to rent to him. Even with that amazing credit score. This may be wine near my home in Venice Beach tent cities are filling freeway, underpasses streets are lined with people living in their cars. And just last Sunday, a bunch of homeless people caused a fire in a construction site where they were sleeping and and that fire damage several homes. Thankfully, no one was hurt. But the problem is everywhere. And there is no simple solution. But one thing is clear, skyrocketing rents and stagnant low wages, they are causing this disaster, the current financial minimum wage was last raised to $7.25 in 2009. And some economists are already saying that the proposal to raise the minimum wage to $15 an hour is still not enough for people to survive. It's really bad out there for a whole lot of Americans. Here's the thing to remember, evictions are a complicated problem in the credit world. But we have to educate ourselves and our customers on how evictions impact credit, and we need to teach strategies for eviction recovery. Now, I say it's complicated because evictions usually won't show up on credit reports at all, but they typically stay on public records for up to seven years. In other words, evictions don't directly affect credit reports. But credit can be impacted by the circumstances relating to the eviction. Here's why this is important. If someone is evicted for reasons other than non payment of rent, like violating their lease agreement, their credit, it shouldn't be affected at all. Okay, if someone is evicted because they didn't pay their rent and they have a collection account open, then their credit reports will have a derogatory mark for that collection, and that can stay on their credit report for up to seven years. And that collection account will negatively affect a credit score beyond credit reports. If a legal case is brought up to evict a tenant, that case file can be accessed indefinitely through court records. It's also important to know that an eviction it shouldn't make it more difficult to get financing for a new loan. But it could make it harder to get a new apartment to rent. Because landlords use public records databases to determine if someone has been evicted in the past. So even though evictions don't technically affect credit reports directly. They still impact people's credit and they have long lasting consequences, resulting in lower credit scores, higher interest rates and marks on your public record. Words that all contribute to making finding rental housing very difficult in the future I haven't asked but I bet that's why my friend is living in a tent. So here's what you need to know. Of course, the best piece of advice is to avoid evictions altogether. With that being said, if someone is evicted for any reason, besides non payment of rent, then their credit won't be affected, they'll probably just need to explain the situation to their new landlord and expect to pay slightly higher rent. However, if someone is being evicted for nonpayment of rent, and they're still in the eviction process, they should do everything in their power to fix the problem before it goes to court, settle, pay the back rent, work things out with the landlord and determine a mutually beneficial solution that doesn't involve the courts. I wish I had known that when I was evicted, because that's on my record forever. Now, if someone is wrongfully evicted, they should consider pursuing legal action in court. And if you or your clients would like to learn more, the CFPB lists renter protection resources on its website, and we're gonna put a link to that in the show notes. Now someone was already evicted because of non payment of rent, and that debt went to collections. Just follow these five steps to remove that from the credit report. First, attempt to repay or settle the debt, negotiate with a property manager or landlord or a collection agency and determine a sum or payment plan. Next, when the debt is settled or paid off, request any collection accounts be removed from their credit reports, then asked to have the eviction records removed from the tenant screening reports as a condition of repayment. Next, verify that the items related to the eviction had been removed from their credit report, as well as the tenant screening report and finally dispute any inaccuracies related to the eviction with the credit bureaus and the tenant screening agencies. Now if handled correctly, evictions can be avoided. But when circumstances cause them to be unavoidable, you can still ensure that the impact is minimal, instead of devastating. And here's my final point. When people are evicted, they don't just lose a home, they lose the ability to easily find their next home. Whether it's because of inflation, not enough affordable housing or stagnant wages, no one should be forced to live in a tent, in their car or on the street. As this eviction wave approaches, we have to be prepared to help a whole lot of people. And just a reminder, this podcast is brought to you by credit hero score. Credit hero score is the only credit monitoring service that integrates directly with credit repair cloud get instant access to your credit reports and scores by signing up for a seven day trial for only $1 Sign up right now at credit hero score.com.

 

And now for my favourite part of the episode. Each week I'm featuring one of our credit heroes inside our credit repair cloud Facebook community so that you can see firsthand what real people are doing as they launch and grow their business. And today's spotlight is on Michelle see first off Michelle has an incredible business slogan, cash is king credit is power. But more than that she recently posted a picture in our community that showed one of her clients credit scores being boosted by more than 55 points per bureau. Michelle explain why she was so excited to share this saying this made my day six ad was all she needs to start her home buying process. She's now close to 700. I'm so happy for her huge congratulations to her. Wow, thank you, Michelle for sharing that you are amazing. And I truly believe there is no greater gift than helping someone find a home. So keep up the amazing work and keep posting these inspiring messages. And I'll end by saying if you don't already have a credit repair Cloud account, check it out. It's a software that most credit repair businesses in America run on. Just sign up for a 30 day free trial at credit repair cloud.com/free trial and if you'd like me to hold you by the hand as you grow your very own credit repair business, check out our credit hero challenge. It's a live experience that has helped tonnes of credit heroes to get their first clients get certified in disputing and to gain confidence as they launch their credit repair business on a solid foundation so they can change a whole lot of lives and make a great living in the process. process, we're starting the next challenge very soon. So you want to join before the door is closed, or you're gonna have a long wait until the next one. So sign up right now at credit hero challenge.com. And if you're finding value in the things that I share on this podcast, be sure to click the subscribe and leave me your questions and comments below because I read each and every one of them. Be sure to visit my blog if you'd like to read the show notes. And if you have a question that you'd like me to answer, just drop it down in the comment section, and I'll be sure to answer it during a later episode. And until next time, remember, when you repair an eviction, you help someone find a home, keep changing lives, want a fast track to creating an amazing business that helps people change his lives and makes you a great living in the process that I'd like to invite you to my free online training at credit repair cloud.com/free Training. In this free training, you will learn how to get clients willing to pay you even if you're just starting out how to get easy credit repair results without being an expert, and how to get all the clients you'll ever need without paying for advertising. Again, this training is absolutely free. Just visit credit repair cloud.com/free training

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