How does your Employment Status effect your Credit Score?
One of the most important aspects of securing credit or a loan is the ability to pay it back. Lenders look at the amount of debt you
have and compare it to your current earning power, along with your past employment history. If you don’t have consistent income, lenders
are not as likely to extend a loan or credit to you.
However, this doesn’t mean that your credit score will be affected by your employment status. This is because there are measures you can
take to stabilize your credit score while you are hunting for a job.
What Does and Doesn’t Affect You
The most important thing to know is that, by law, credit bureaus can’t adjust your score based on employment status. Employment status,
however, can be a factor when lenders look at your credit report [link to Credit Reports page]. If you are unemployed, it may be apparent
in your personal information and employment history that is gathered. Unemployment also tends to show up in your recent inquiries and
credit history if you begin to have problems paying your bills.
Keeping Your Credit Score Up
The good news is that there are certain things you can do to gain some level of control over your credit score. It requires that you stick
to a budget and make the following a financial priority:
Existing Accounts
Pay your bills on time. Even if it means sending the minimum payment possible, do it. This includes payments on all loans and credit lines.
Staying current on accounts helps your credit score and enables you to protect your future buying power.
New Accounts
Don’t apply for new accounts. This includes credit lines from your bank, department stores, card companies, or any other entity. Opening new
accounts and having new debt affects your credit score and will reduce your future buying power.
