The 2022 job market is crazy and can mean many things to different people. Even though unemployment is low, many companies are engaging in layoffs. If you’re faced with unemployment, make sure you’re protecting yourself and your financial health. Here are some things you’ll need to consider while going through the process.
Does Collecting Unemployment Hurt Your Credit?
The short answer to this question is, “No.” Filing and collecting unemployment will not directly impact your credit score. However, being unemployed can trickle down to your finances, which can affect your credit in the near future.
If you qualify for unemployment, you should absolutely file for it. It’s a challenging process, and unemployment rarely pays much, but even a little money coming in can help you keep your head above water while looking for your next job.
How Can Being Unemployed Affect My Finances?
While unemployment doesn’t affect your credit directly, there are other things to watch out for. You can easily fall behind as you adjust your financial life to a period without work. For example, losing your income could mean more reliance on credit cards.
Increasing your debt without being able to pay it off until you have a job can also affect future loans that figure in your debt-to-income ratio. Credit utilization and payment history are the two most important factors of your credit score, so if you fall behind with payments, your credit score will drop.
Tips for Maintaining Healthy Credit While Unemployed
Being fired from a job is never fun or easy. When the unexpected happens, it’s vital that you know what to do next. At Best Credit RX, our clients are people like you who have tried to do all the right things and still find themselves in trouble. We can help you fix that. Here are three helpful tips if you find yourself unemployed.
- Keep making payments on time: this is most important for the big things like your mortgage or rent. However, pay on time every month even if you only pay the minimum on your credit cards.
- Check your credit score: keep tabs on your credit while unemployed.
- Don’t be afraid to ask for help: if you start to slide, don’t wait too long before asking for help.
Sign up with Best Credit RX today and start on your journey to becoming your own financial superhero.