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Are you a lousy tenant? 7 ways it can cost you

Now that your rent payment history can affect your credit scores, your rental history matters more than ever before.

By MSN Money Partner Aug 23, 2013 12:53PM

This post comes from Angela Colley at partner site Money Talks News. 

MTN logoAccording to the National Multi Housing Council, 32% of Americans are renters. If you're one of them (and I am), you really should try to be the best tenant you can be.

Rental market (© Dana Hoff/Beateworks/Corbis)And not just because it's the right thing to do. Tenant screening services have gone digital, and landlords can see your rental history with a few clicks. If you've been a great tenant, you'll reap the benefits. But if you have a blemished past, you could face everything from higher rent to lower credit scores.

Let's look at the pitfalls of being a lousy tenant, and then some tips on how to turn it around.

1. You'll pay penalties

Say you have a problem paying rent on time. At my last apartment, the landlord charged $50 if you were late and $5 for each day you didn't pay up. If you're four days late, that's an extra $70. Make that a monthly habit and that's $840 you've thrown away.

2. You might lose your place

If you break your lease, your landlord can evict you, leaving you scrambling for a new place to live -- and now with a black mark on your rental history. But even if you aren't evicted, nothing says your landlord has to let you live there once your lease is up. In many locations, it's up to the landlord -- not you -- to renew the lease. If you've been a problem tenant, he may not roll out the welcome mat for another go-round.

3. The rent just went up

If your landlord does renew the lease, you could see a jump in your rent. Unless you live in a rent-controlled building, your landlord can raise the rent at the end of every lease, and if you've been a problem, she doesn't have any motivation to keep rent low so you'll stick around.

4. Goodbye, security deposit

Your security deposit is refundable if you've been a stellar tenant. If you caused damage, didn't clean up after your move, or left owing your landlord rent or late fees, he can legally recoup those costs from your security deposit. Instead of getting a check in the mail after you move, you might see an invoice.

5. Hello, lawsuit

If the amount you owe the landlord after your move exceeds your security deposit, you could wind up in court. Under landlord and tenant laws, your landlord has the right to sue you in civil court for damage repair and unpaid fees. If the court decides in your landlord's favor, it will show up on your rental history, and Experian says it will stay on your credit reports for seven years.

6. Finding a new rental will be harder

All it takes is Internet access and a small fee for any landlord to read up on your rental history. If a landlord sees past problems, he may deny your application altogether, wasting your time and your application fee.

What's worse: You may not get the apartment you really wanted and have to settle for something else. This could mean a longer commute to work, an inferior apartment or a sketchy neighborhood.

And when you do find an apartment, you might pay more than someone else. Some landlords will approve tenants with a spotty past, but they might charge a higher upfront security deposit or raise the rent.

7. Your credit score could take a hit

It used to be that your rent payment history would show up in your credit reports only if the landlord sent the debt to collections or won a civil suit against you in court. But in 2011 major credit bureau Experian announced that it was including on-time rental payments gleaned from tenant data service Experian RentBureau in its credit reports if a renter opted in for that. The move was widely hailed as a way for people with thin credit files to build better credit scores.
Experian reportedly had planned to begin including late rent payment history the following year. However, an Experian spokesperson said this week, "We do not incorporate negative rental payments into our scores." RentBureau has data about more than 9 million tenants and is seeking to increase that number.
Meanwhile,the Chicago Tribune reported last year:

Starting March 1 (2012, certain FICO scores will begin to include rent payment data collected by CoreLogic Credco, a specialty credit reporting agency.
At first, the new scoring will be available only to mortgage lenders, which check your credit score before approving you for a home loan. But, said Joanne Gaskin, director of product management global scoring at FICO, "In the future we hope to offer something similar to credit card companies and other lenders."

So a rent payment that is more than 30 days late has the potential to hurt your credit score if your landlord reports payment history to a credit bureau or third-party service.

Be a better tenant

How do you avoid all this? Being a stellar tenant really isn't hard. Here are a few pointers:

  • Pay your rent on time. Always pay your rent no later than the due date (or before if you want brownie points). If you’re running late, immediately tell your landlord why and when she can expect payment. Landlords are human; they’ll understand as long as you don't make a habit of it.
  • Follow the lease. Always read the lease before signing. If you see a rule you don’t think you can – or should have to -- follow, find another rental or get the landlord to change it in writing. Once you sign the lease, you are legally expected to follow it.
  • Don't make changes. Always get written approval from your landlord before you adopt a pet, let your significant other move in, or make changes to the property.
  • Don't wreck the place. That property is your landlord's investment.

Karen Datko contributed to this report.

More on Money Talks News:

Sep 25, 2013 4:47PM
I'm a landlord and I've had excellent and bad tenants.  I have several rental properties. I had one tenant stay for 20 years.  I offered to paint, change carpet, redo bathroom but she liked it the way it was.  I kept the rent below market for her to keep her. Another tenant signed lease strictly forbidding pets. found out 6 months later they had cats in house.  3 months before end of lease they stopped paying.  Tried to evict but they moved out by time papers were served.  Over $3000 damage from cats on walls, woodwork and carpets. plus $3000 in loss rent.  Chased them for 3 years across 2 other states before I gave up trying to collect.  They had excellent reference and credit check.  Don't know why they turned out so bad.  I've also rented to people who had terrible credit rating.  One guy just divorced ended up with his three kids , lost his house in a bankruptcy.  He was honest up front, had the same job for over 10 years, personal reference great so I rented to him.  After three years, never late and place is clean, kids well behaved.  It goes both ways. 
Sep 25, 2013 4:44PM
I had a former landlord try to deduct damage to kitchen linoleum (if they even still make it), that was at least 15 years old and had a couple of round holes where you could see the three other layers of cheap linoleum underneath.  These holes were there BEFORE I moved in, and I suspect before other tenants had moved in, but I had documented it.  I think this landlord probably used this ruse for many years to scam people out of their deposits.

Pay your rent on time (with check or money order and keep the cancelled check/receipts); don't be a pain; and document EVERYTHING prior to moving in.  That is how you protect yourself

Sep 25, 2013 5:03PM
I currently have a rental property.  These are my first tenants and I love them!  I think the feeling is mutual because I always try to repair and issues expeditiously.  I wish they could stay forever, but all good thing must come to an end :0(
Sep 25, 2013 5:54PM
What about does your tenant hate you???  I lived in a place for years with the worst landlord around.  And due to the rental bubble in my city I had no choice but to remain there.  My landlord owed taxes. So,  myself along with 2 other units in the building had to pay the IRS for her the time we rented from her.  She lived in the 4th unit in this 4 plex.  Also when something went wrong and any of us would ask her to fix it, her reply was "I wish it were happening to me."  And would not address the issue.  So I wish there was something that could happen to a horrible landlord and them pay for there ignorance and denial.  Like loose the property. 
And for the record, I was never late for rent, helped her with shoveling, even did what she called "a mercy mowing of the lawn."  All because if it wasn't done by her, it wouldn't get done and it was an utter embarrassment for friends to come over and see it like that.  
Sep 25, 2013 5:22PM
I been in my apartment 9 years now. My rent is always paid on time, and I do not cause problems. But my landlord never fails to raise my rent by a few bucks every year even though he never takes care of the property. Weeds are always 6 feet high or more. The bushes always need stimming. Grass is only ever very poorly cut. Dead trees do not get cut down. And this building is in a high profile area.
Sep 25, 2013 5:22PM
what about all the slumlords we have?
Sep 25, 2013 4:55PM
Although I haven't rented in 20 years this article made me think of the last apartment my wife and I rented for 8 years.  The rent went from 600 -625 in 8 years.  They returned my security deposit after 3 and my last months rent after 4 as keeping them in a bank account required by law apparently wasn't worth the expense.  We paid them on time and they fixed everything we asked immediately.  Amazing how bad tenants make for a bad landlord and good tenants make for a good one.  Of course living in the Peoples Republic of Massachusetts I would consider owning human slaves before rental property, given the laws here in Progressive hell.
Sep 25, 2013 4:54PM
Question is, are you talking about property owned by corporations who have managers or property owned and managed by the landlord?   I'm the latter.  I handle all the calls of brocken pipes, furnaces not working etc.  In over 25 years of renting properties, I make about 3% on my investments and nothing for my time and labor.  Not enough to live on so I work a full time job.  This is my retirement nest egg.  Hope to have all properties paid off by time I retire so my income from rental properties will be about $1000 to $1500 a month after expense. 
Sep 25, 2013 4:48PM
Here in Colorado there is little protection for tenants.  I live in a place that needs so much maintenance I'm surprised the City/County hasn't come in and taken action.  The management company doesn't care about doing repairs unless it creates overflowing toilets or sinks.  I've asked for things to be fixed for a year now and hasn't been done.  The only positive side is that he hasn't raised our rent in 4 years.  He knows that if he raises the rent, the people living there will move out, then he'll have to spend the $$ to update (that's a relative term) the apartment and then he may be able to get more of market rent.  So, when landlords complain about their tenants, I take that with many grains of salt.  Most landlords I know today are making a killing here in Colorado!!!!My advise, save money, clean your credit up and find a house to buy!!!  I was a homeowner until the last "economic downturn" and was an early casualty of it.  Renting sucks as most landlords care about that check every month and little about their actual tenants.
Aug 25, 2013 8:46AM

I live in Quebec, there is no such things as: security deposit, late payment penalty. the city has the housing office. I had evicted so many bad tenants but I couldn't collect the lost of $$ for repairing, official paper fees...The PQ housing dept. always protects tenants than small landlords try to make a living.

Even I have all the documents from Regie Lodgement to win the case, but to hire the collection office

to get back $$$, it could costs me more $$. It is a joke in Quebec.

Sep 25, 2013 6:42PM
I'm a landlord of five properties in my town. Every month I pay off $1800 in mortgage debt and put about $1200 in my pocket. Sometimes I have repairs or vacancies but I've never come close to a negative month. I LOVE my tenants!!!
Sep 25, 2013 7:43PM
So many people were caught in the financial crisis, the past few years would have been almost impossible to find good tennants without bad credit.  You still need to look at credit reports though to see WHY their credit score is bad.
Sep 25, 2013 4:46PM
does your landlord hate you? probably.
Sep 25, 2013 6:04PM
The landlord can't raise the rent from the original advertisement or quote just because a prospective tenant has bad credit!  Where did you get that?!  I work in an apartment office and at least in California, that is absolutely begging for a lawsuit AND Fair Housing all over you.  You may turn someone down because of their credit score, but you can't exact singular penalties!
Sep 25, 2013 4:51PM
Actually, I've been taught to look into by own situation when I think something like that is going on. It's done me a world of good too.
Sep 25, 2013 9:01PM
I have the BEST landlord in the WORLD!  This place won't be for rent EVER AGAIN. :)
Sep 25, 2013 9:20PM
Like Billy Ma--30 plus yrs with 16 apts. Also full time job.  I was considered a great landlord, Treated eveyone fairly. Rarely raised rent & fixed everything. But there are terrible people out there & they can destroy you. Usually with the help from the courts. Sold recently, very little profit. 68 yrs now, so much work, my body worn out. So retirement, not what I thought or planned for. So please think everything out before you invest in rentals. You must have  the patience of a saint!
Sep 25, 2013 5:35PM
Buy a property if you can.  Most landlords could give a SH&^ about condition of rental unit or your well being.

Laws work both ways; for example, your landlord has to provide means in which to look up whether or not a registered sex offender is living in unit next to you.  Many landlords do not, why should they.  
Sep 25, 2013 7:34PM
i run a trailer park  and we get a lot of turn over most are good but we get a few i have to file papers on and  the boss will spend hundreds of dollars to put in new carpets and stuff but the tenets will wreck the place not pay rent and run up water bills and electric bills  most are low life no good a holes  we spend tons of money to fix the rentals up they destroy them 
Sep 26, 2013 1:30AM
It goes both ways.  I rented a place with a two year lease.  I was always on time with the rent, kept the yard nice and kept the house nice.  But the landlords were horrible.  Always making new rules, not repairing things that should have been, making me pay for big yard maintenance work, expected me to trim 50 ft. trees, and always yelling and lying.  Then they wouldn't give me my deposit back which was $1800.   It was awful, but I never complained because I didn't want to upset them.  They had a very short fuse.  Then they charged me 5 extra days rent because I left some yard tools.  They said they would continue to charge rent until all my things were gone. 
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