Collecting unemployment benefits does not directly affect your credit report or your credit score. However, the fact that you are unemployed might negatively affect your ability to get new creditm because your income is limited and unstable.
Check Your Credit Report
Everyone is entitled to check her credit report once each year, free of charge. You can do this at AnnualCreditReport.com. This site allows you to receive your reports from the three reporting agencies: TransUnion, Experian and Equifax.
These companies take reports from all of the banks or loan agencies that have loaned you money. They will track how much debt you currently have in comparison with your available credit, and they will highlight any negative reports to your credit.
Employment Is Not Considered
Your credit report is simply a record of how you have handled your debt. If you are late with a payment or didn't pay a bill, the company to which you owe money will report that to one of the three agencies so other lenders can see it.
The reporting agencies do not track your current employer, salary, or similar information.
When You Want to Borrow
When a lender extend you credit, the lender considers more than your credit score and your credit report. It needs to know that you aren't about to take on more debt than you can repay. Because of this, the lender is going to want to know your monthly income.
Unemployment benefits are a form of income, but they eventually run out, so the lender will view them as unstable. This will make any lender reluctant to lend any large sumy, such as for a home mortgage or a vehicle loan, until you establish something more stable.
Once you do find a job, or begin a business with regular income, the lender will look at you as though you were never unemployed in the first place. Things happen, and people lose their jobs from time to time. As long as a person demonstrates that they can be trusted to repay their debts, and as long as they show a solid income stream, lenders will be happy to consider you.
Unemployment and Defaults
It could happen that losing your job causes you to default on one or several loan payments. In this case, your credit would be damaged as a result of being unemployed.
In such a scenario, the damage might not be so terrible, as you could explain to future lenders that the defaults were the result of a job loss in a terrible economy. This should dissuade some lenders, who otherwise might be reluctant to lend to a person with a history of missed payments.
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