The effects of breaking your lease on your credit

Credit can be a very difficult thing to figure out. You know you need credit and a good score to buy things like houses or cars or to get different types of loans. However, you don’t start with good credit and then turn into bad credit, you actually start with no credit at all. This means that you need to start building your credit history. How you do this can vary from person to person, but a great way is to start having bills in your name and paying them on time. So what happens if while you are building your history by renting an apartment or a car, something happens and you have to terminate your lease? Ending a lease can drastically affect your credit peace of mind.

First you need to understand what exactly a lease is. A lease is a contractual agreement between the lessee (the user or customer) and the lessor (the owner or dealer) for the use of an asset. It can often be called a rental agreement and can be used for almost anything that is tangible property. This can be anything like a car, house, or apartment. There are other things that can be leased under the category of intangible property, ie computer programs or radio frequencies. No matter what is leased, it always comes with terms and conditions.

The terms and conditions of a lease change from place to place and from object to object. For most apartment or house rentals, they have a minimum and maximum number of months that the lease covers. After those months, you can decide if you want to renew your lease or find another place to live. However, there are some things that can happen where you may have to cancel your lease early. While this may be something you can do and it’s described in your lease how you would do it, it can still hurt your credit score if you’re not careful.

If you break your lease and don’t pay your rent as agreed, or you didn’t follow the steps in your lease, then the landlord can take legal action. This may mean they send him a notice saying he hasn’t made a payment and then report it to the credit bureau. Once this is sent to the credit bureau, your credit history will show that you have a debt that you have not paid and it will hurt your credit.

Of course, if something like that goes on your credit history, it will stay there for at least 7 years. If for any reason you have to break your lease, be sure to talk to your landlord and follow the steps outlined in your rental agreement. Working with your landlord (or any landlord for that matter) can help prevent a debt from being reported on your credit report, preventing your credit from going down.