Could going to court over my security deposit hurt my credit?

October 17, 2006 4:40 PM

Security Deposit Dispute: Will going to court hurt my credit?

I'm considering going to court to get back more of my security deposit and my landlord has suggested that going to court might hurt my credit rating. This thread suggests that a landlord could ding my credit rating over money I owe him, but is there any way that losing an attempt to get back some more of my deposit could hurt my credit? Even if I didn't want to pay him a debt I owed him, I couldn't because I'm the one who thinks I'm owed money. I'm in Michigan, USA.

Oh and I'm not interested in discussing the merits of my claim or the merits of taking such a small claim to court.

posted by Xalf to health & fitness (10 comments total)

Your landlord can to register the debt against you via a credit collection agency.

I am not a lawyer (IANAL), but I have never heard of anyones credit being effected by going to court. If your landlord is threatening this, it sounds like he may have something to hide.
posted by SirStan at 4:43 PM on October 17, 2006

If you don't owe him any money, he can't report anything. Make sure you've got a rock-solid case and consult with an attorney before you go forward, though.
posted by Mr. Gunn at 5:31 PM on October 17, 2006

If there is a court judgment against you, it should show up on your credit report.

If you are suing and the landlord is the defendant, and the court awards you a judgment against the landlord, it would be a ding against the landlord's credit. Typically, a landlord would be operating as a management company, the judgment in that case would be against the company, and probably not against the landlord's personal credit.

(Credit experience, not a lawyer.)
posted by gimonca at 5:34 PM on October 17, 2006

is there any way that losing an attempt to get back some more of my deposit could hurt my credit?

No.
posted by rhizome at 5:43 PM on October 17, 2006

gimonca: Do you have any backups for that (url, otherwise)? Not that I dont trust you, but I am curious for details. I have never heard that.

Sorry for the misinformation.
posted by SirStan at 7:50 PM on October 17, 2006

If there is a court judgment against you, it should show up on your credit report.

This doesn't really have anything to do with the question. It's sorta true but you're confusing having a "judgement" against you (as in, your landlord gets a court to declare that you owe him money) with losing your case (as in you fail to convince the judge the landlord owes you). I can't conceive of any way your credit will be hurt if you go after the landlord for money you think he owes you. You might lose your case, but that won't ding your credit. All you're out is your time and legal expense (if any).

The single exception I can think of is if he counter-sues for something, wins, and you fail to pay that amount within the alloted time. In most jurisdictions landlords have pretty strict requirements for when and how they must notify you of damage claims, so this seems very unlikely.

I'm not a lawyer though, so what do I know?
posted by jaysus chris at 8:00 PM on October 17, 2006

unless he's countersuing you for damages, your failing to get back part of your deposit in small claims court should not hurt your credit ... unless your landlord is threatening to make some kind of phony statement to credit reporting agencies

he can be sued for that, if he does it, although it may not be worth the time and expense involved

as far as the merits of a small claims case is concerned, if you think you have a chance of getting something from it, then it is worth your time to do
posted by pyramid termite at 8:41 PM on October 17, 2006

oh, and i don't think the "i'm not a lawyer" thing that people usually say about legal matters is as relevant here, as the whole point of small claims court is for people to bring cases without lawyers involved
posted by pyramid termite at 8:43 PM on October 17, 2006

Unless the laws have changed, it is rather easy to find against a landlord in Michigan. Loosing can't affect your credit. Get fully informed of the law and detail every way in which the landlord is in violation (typical for self-managing landlords, they don't put security deposits in interest-earning accounts, and notify you as prescribed by law, as a good example). Some violations from landlords can net you triple damages, iirc.

IANAL, I am a native of Michigan who has been subjected to questionable landlord practices.
posted by Goofyy at 2:01 AM on October 18, 2006

I agree that it can't hurt your credit unless there's some kind of countersuit. But, depending on the housing market there, it may hurt your ability to rent in the future. In NYC, there are companies that collect information about landlord/tenant cases and sell the info to landlords. Many landlords blacklist people with an L/T history, regardless of the merits. I have no idea if they collect info on small claims cases, or if landlords in your area can be so choosy.
posted by Mavri at 5:41 AM on October 18, 2006