As everyone already knows, the US unemployment rate has been strikingly high over the few years, resting at 9.8% in January 2011 according the US Bureau of Labor Statistics. That’s down from a high of 10.6% in January of 2010, but our nation still has nearly 1 out of every 10 citizens unemployed.
As if life wasn’t tough enough already for US consumers, creditors have tightened up their approval requirements. Yes, finance and refinance rates, especially in the home mortgage industry, are as low as ever, but hardly anyone has the credit score to get approved. This has left many people in our nation’s workforce to ask:
Will unemployment hurt my credit score?
The answer to this question depends upon the way unemployment is being defined. There are really two questions here:
Will filing for unemployment hurt my credit score 토토?
Will not being employed hurt my credit score?
Let’s look at the first question first. The answer is no: filing for unemployment benefits should not damage your credit ratings. And although future lenders down the road will in 99% of cases require you to have a job before they approve you for any sort of loan, they will not count an unemployment filing against you if you were laid off or fired from a previous job.
While filing for unemployment benefits may not hurt your credit, being unemployed certainly can. Living off of emergency funds and/or unemployment benefits can be tough going. Most people find it difficult to change their lifestyle so abruptly. After all, your monthly budget may need to be cut nearly in half. For that reason, it’s common for people to begin charging more on their credit cards – charges which they won’t be able to pay down until they get a new job, which could take months. Carrying a high balance on your revolving credit accounts is a sure away to harm your credit score. The same goes for getting behind on car loans and mortgages. Being delinquent on a loan is a surefire way to lower your credit score and make you a less attractive candidate to lenders in the future.
For this reason, it is essential that, if you fear unemployment in your future, you begin to set aside a percentage of your income for an emergency fund. Most experts recommend that you save up sufficient funds for three month’s worth of living expenses, if possible. This could keep you from falling behind on your bills and doing serious damage to your credit score.
If you need to buy a car after unemployment, you might try tote the note car lots or in house financing auto loans. Both of these avenues of financing are more receptive to people whose credit scores have been damaged by months of going jobless.