March 17, 2020 at 10:29 pm #66331Elliott BalsleyParticipant
I am currently renting a house, preparing to buy next year. My two housemates have been laid off due to Coronavirus, and they might not be able to pay rent for a while. Many cities have ordered a moratorium on evictions, but I’m wondering what effect this will have on a credit report. Since we are all jointly on the lease, any missed payments from them would look bad for me too, and I know that late rent is a major red flag for NACA.
If there is a moratorium on evictions, does this also mean late payments would not be tracked?March 17, 2020 at 10:35 pm #66332Elliott BalsleyParticipant
Apparently landlords only report late payments at their discretion, and in fact doing so requires their paying a fee to each credit bureau. So in general, how does NACA find out about late payments? Do they just check the credit report or something else?March 17, 2020 at 11:17 pm #66334NelsontMember
They check the rental ledger of your landlord, canceled checks and bank statements.March 18, 2020 at 9:06 am #66339BakerTheBakerMember
Indeed, they don’t just rely on the credit reporting. You’ll have your rent verified month by month looking at the account you’re paying from and the landlord’s records as reported by them on a form.March 18, 2020 at 12:58 pm #66343TTrumbleMember
Rent is verified as Nelsont noted, through a Verification of Rental form sent to your landlord as well as your bank account records and cancelled checks.
Late rent as a result of layoffs caused by the Coronavirus situation will no doubt have to be looked at on a case by case basis.
One question I foresee coming is from people in situations such as yours or others who have been laid off or are working greatly reduced hours, but have significant savings for their MRF and want to know if they should use those funds to pay their rent or hold on to them.
Very simply, if you have the funds to pay the rent, pay it, period. If your counselor sees that you were late with the rent but had the MRF funds and didn’t use them for the rent, you will face a twelve month setback without question. Please remember that on-time rent payment is the most fundamental means of showing that you are able to make an on-time mortgage payment each and every month.
Better a brief setback to rebuild MRF than a full year that could be completely avoided.
Bottom line is this is uncharted territory for all of us, and we are all simply going to have to work together, have even greater patience and be willing to endure a setback or two in some cases. But we will get through all this together.
Online Operations, NACA
- This reply was modified 7 months, 1 week ago by TTrumble.
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