A credit crisis sweeping the United States!
1112025/4/3
If I told you that you would not be able to rent a house, get a loan or even find a job in the next 3-5 years just because you owe one or two months' rent, would you believe it?
In the United States, more and more people can't afford to pay the rent, so they are sued by the landlord and the debt collection company. What's more frightening is that their credit will plummet.
Last month, the Wall Street Journal reported a tenant named David Murray, who was once an American tenant with an ultra-high credit score of 815 points and was a quality customer in the eyes of banks. However, a rent dispute with the landlord changed his life dramatically.
The cause of the matter is very simple:
In 2022, David ended the lease early for personal reasons and moved out of the apartment. He felt that all his responsibilities had been fulfilled and he did not owe a penny. As a result, a few months later, he suddenly received a notice from the debt collection company that he owed $4,500 in rent and other expenses.
Of course, David refused to accept it and provided various documents to prove that he didn't owe money. However, 19 days after receiving the report from the debt collection company, the credit rating agency rejected his complaint and directly recorded the debt in his credit report.
What makes David even more powerless is:
Credit scoring agencies only listen to the relevant documentary evidence provided by debt collection companies and landlords, and it is impossible to cancel the records unless there is a court decision. Then the debt collection company only believes the landlord's statement unilaterally in actual operation. Even if the landlord's allegations are controversial, as long as the landlord provides a valid lease contract or proof of rent arrears, the debt collection company can immediately file the system, and the tenant's breach of trust is certain.
Therefore, David's credit score plummeted from 815 points to 630 points, from high-quality customers to "high-risk users" that both banks and landlords avoided. This accident not only prevented him from applying for a loan or renting a house, but also affected his future career development.
If David's experience is unlucky, then the following story of Bre-Ana Garland can only be said to be absurd. Garland is a single mother with three children, and her life is already tight. As a result, she rented an illegally rented house. Because of the economic dispute, the landlord took her to court. Although the court finally ruled that the landlord lost the case, it was ruled that Garland did not need to pay any fees because the house itself was illegal to rent.
However, the landlord still submitted this "false debt" to the debt collection company, and the debt collection company did not verify it, and directly reported the debt record to Garland's credit report.
As a result, Garland's credit score plummeted, and no new landlord was willing to rent it to her. In the end, she had to take her children to live in a cheap hotel, the cost of living soared, and the whole family fell into a crisis of survival.
Garland was definitely unwilling and chose to file a lawsuit again. The court finally ruled that the debt collection company Fidelity Creditor Service would compensate her for $100,000 and delete the false records.
But! The debt collection company refused to implement it, Garland didn't get compensation until now, and her credit score didn't recover. She almost used up all her savings to go to court, but she was still unable to change the status quo, and life continued so hard. ...
What on earth caused the American rental market to become so cruel?
The rent subsidy during the epidemic has ended, and the government relief that many people rely on is gone. The rent price has been rising all the time, but everyone's wages can't keep up, which makes most people simply unable to pay the rent.
In addition, the landlord himself is also facing loan pressure, unwilling to tolerate the tenant's default, and can only turn to legal channels and debt collection companies.
According to reports, millions of rent debts in the United States are being handled by debt collection agencies, and behind this, millions of tenants are about to be or have been abandoned by the credit system.
In the past, landlords and tenants could negotiate to solve problems.
But now, in order to reduce losses, landlords are more inclined to recover debts through debt collection agencies.
However, the problem is that once they embark on the road of collection, tenants not only owe rent, but also bear high reminders and legal fees, which are included in the debt, which directly makes them unable to turn over.
For countless ordinary people, even a rent default caused by short-term unemployment and illness may mean a nightmare of homelessness, no loans and no credit in the next seven years.
This is not just a personal problem. If we don't reflect and change, who can guarantee that we won't be the next David or Garland in the future?
In the United States, more and more people can't afford to pay the rent, so they are sued by the landlord and the debt collection company. What's more frightening is that their credit will plummet.
Last month, the Wall Street Journal reported a tenant named David Murray, who was once an American tenant with an ultra-high credit score of 815 points and was a quality customer in the eyes of banks. However, a rent dispute with the landlord changed his life dramatically.
The cause of the matter is very simple:
In 2022, David ended the lease early for personal reasons and moved out of the apartment. He felt that all his responsibilities had been fulfilled and he did not owe a penny. As a result, a few months later, he suddenly received a notice from the debt collection company that he owed $4,500 in rent and other expenses.
Of course, David refused to accept it and provided various documents to prove that he didn't owe money. However, 19 days after receiving the report from the debt collection company, the credit rating agency rejected his complaint and directly recorded the debt in his credit report.
What makes David even more powerless is:
Credit scoring agencies only listen to the relevant documentary evidence provided by debt collection companies and landlords, and it is impossible to cancel the records unless there is a court decision. Then the debt collection company only believes the landlord's statement unilaterally in actual operation. Even if the landlord's allegations are controversial, as long as the landlord provides a valid lease contract or proof of rent arrears, the debt collection company can immediately file the system, and the tenant's breach of trust is certain.
Therefore, David's credit score plummeted from 815 points to 630 points, from high-quality customers to "high-risk users" that both banks and landlords avoided. This accident not only prevented him from applying for a loan or renting a house, but also affected his future career development.
If David's experience is unlucky, then the following story of Bre-Ana Garland can only be said to be absurd. Garland is a single mother with three children, and her life is already tight. As a result, she rented an illegally rented house. Because of the economic dispute, the landlord took her to court. Although the court finally ruled that the landlord lost the case, it was ruled that Garland did not need to pay any fees because the house itself was illegal to rent.
However, the landlord still submitted this "false debt" to the debt collection company, and the debt collection company did not verify it, and directly reported the debt record to Garland's credit report.
As a result, Garland's credit score plummeted, and no new landlord was willing to rent it to her. In the end, she had to take her children to live in a cheap hotel, the cost of living soared, and the whole family fell into a crisis of survival.
Garland was definitely unwilling and chose to file a lawsuit again. The court finally ruled that the debt collection company Fidelity Creditor Service would compensate her for $100,000 and delete the false records.
But! The debt collection company refused to implement it, Garland didn't get compensation until now, and her credit score didn't recover. She almost used up all her savings to go to court, but she was still unable to change the status quo, and life continued so hard. ...
What on earth caused the American rental market to become so cruel?
The rent subsidy during the epidemic has ended, and the government relief that many people rely on is gone. The rent price has been rising all the time, but everyone's wages can't keep up, which makes most people simply unable to pay the rent.
In addition, the landlord himself is also facing loan pressure, unwilling to tolerate the tenant's default, and can only turn to legal channels and debt collection companies.
According to reports, millions of rent debts in the United States are being handled by debt collection agencies, and behind this, millions of tenants are about to be or have been abandoned by the credit system.
In the past, landlords and tenants could negotiate to solve problems.
But now, in order to reduce losses, landlords are more inclined to recover debts through debt collection agencies.
However, the problem is that once they embark on the road of collection, tenants not only owe rent, but also bear high reminders and legal fees, which are included in the debt, which directly makes them unable to turn over.
For countless ordinary people, even a rent default caused by short-term unemployment and illness may mean a nightmare of homelessness, no loans and no credit in the next seven years.
This is not just a personal problem. If we don't reflect and change, who can guarantee that we won't be the next David or Garland in the future?
