 TITLE: What to Know About Unemployment and Your Credit Report CONTENT: How Unemployment Can Indirectly Affect Your Credit\n--------------------------------------------------\nWhile being unemployed won't appear on your credit report or directly impact your credit score, loss of income could lead to circumstances that will. For example:\n*   If you use credit cards to pay for more expenses while unemployed, your credit utilization will increase. Your credit utilization ratio is the amount of your total available credit you're using, and it's one of the most significant factors in your credit score. High credit utilization can drive down your credit score since nearly maxed-out credit cards often indicate risky borrowers.\n*   Limited income could also lead to missed payments on loans or credit cards if you don't have enough savings to make up the shortfall. Since payment history is the biggest contributor to your credit score, missing even one credit card bill could lead to a drop in your score.  \n    Utility bill payments typically aren't reported to the credit bureaus, so paying one cellphone or electric bill late likely won't have the same effect. (One exception is if you use Experian Boost™† to help improve your FICO® Score☉ , though late payments are not considered when you use Boost.) If you miss several bills, though, and the account is sent to collections, that could damage your score.\n*   Applications for new credit can also impact your score. If you apply for additional credit cards, for instance, each application will result in a hard inquiry on your credit report. It will stay on your credit history for two years and generally causes a temporary score drop. Lenders may determine that your search for new credit reflects poor management of your current accounts.\nWhile you're taking whatever measures necessary to get you through a period of unemployment, your credit could see a dip. But keep in mind that credit scores are constantly changing, and a couple hiccups now won't affect your credit forever. Once you are back on your feet, you can take steps to improve your credit and get you closer to your financial goals. END