HOW JOB LOSS CAN AFFECT YOUR CREDIT SCORE

For anyone, job loss is a devastating experience. It happens to the best of us and sometimes suddenly, when one day you’re trucking along and then the next – everything grinds to a halt. While most people do get back on their feet, it can be weeks if not months before there’s any money coming back into the bank account.

Bills, credit cards and the rent will quickly be on the rise, turning the situation into one of life’s most terrifying and stressful events. Especially if you were struggling financially to begin with. In this time, it is quite easy to find yourself missing payments, defaulting and or even facing bankruptcy.

Unfortunately, It’s something that banks see on a regular basis but it won’t stop them from knocking back your home loan application if they see black marks on your credit file.

In short your payment history, types of credit accounts, level of debt, age of credit history, and inquiries to your credit report will affect your credit score. Your employment status and salary are not factors that directly impact your credit score. In fact, your creditors and the credit bureaus may not even find out you’ve lost your job unless you tell them.

Being laid off doesn’t mean your credit score will go down. Many people who lose their jobs do take a hit to their credit, not the job loss itself but this comes from falling behind on payments. If you’re receiving government benefits, your score is safe, as long as you manage to make payments on time.
With or without unemployment, it’s always a good to review your finances and your budget. Don’t delay!

For an honest and unbiased opinion, talk to Think and Grow Finance today on 03 8390 5855 or email mitesh@thinkandgrowfinance.com.au