What Is the Effect on Your Credit Report Went Roommate Breaks Lease Contract

This is a pretty common situation.  When two or more people share a flat they usually have a joint lease agreement between themselves which holds each of them equally responsible for the amount you go to the landlord in case one or more of the other roommates refuse to pay.  In case a roommate bails out of the situation and refuse to pay the amount the other person is deemed to be fully responsible for the money owed to the landlord.  While the landlord will probably not be able to directly reports non-payment to the credit bureau he can sell off the unpaid debts to a collection agency.  Once the collection agency has the debt new account is usually opened in the credit report of person under the studies of collection account.

The landlord may also sue the resident for the damages and the amount of the money owed in a small court.  If the judgment goes against the tenant then this judgment will be reported on the credit report as well.  Both a collection account and the civil courts judgment are considered to be serious negative items in a credit history that have a severe negative impact on the credit score.  The best recourse left open to the person is to pay the landlord his dues and then try other of legal recourse is to recover the money from the roommate who did not pay as agreed.  The problem here arises from the fact that most of the times the agreement between the roommates is on a global basis and becomes harder to prove in a court of law.  But in case somebody made the wise decision of having a written contract between different roommates than recovering the money from the roommate refused to pay the rent would be possible.

Another possible because open to the person could be to get another roommate as fast as possible so that the payments can be continued in the future.  The same holds true for utility bills such as gas, electricity, telephone, water, cable television etc.  If these were also jointly held a long the roommate than the person should contact the utility companies and have the name removed from the contract.