 TITLE: What Is the Difference Between a Recession and a Depression? CONTENT: Can Credit Be Affected During a Recession or Depression?\n--------------------------------------------------------\nA recession or depression itself won't hurt your credit, but its indirect effects on your personal finances can. For example, if you get laid off, you might make a late car payment or miss a credit card payment. You may fall behind on utility bills that go into collections. These events can damage your credit. Additionally, if you're struggling to make ends meet and put more purchases on credit cards than usual, you could harm your credit if your credit utilization ratio gets too high.\nHowever, during economic turndowns, lenders may be more flexible and willing to work with borrowers who are struggling to make payments. Some may automatically offer more leniency, while others might require you to contact them if you need assistance or provide proof of a hardship. If the lender is willing to assist, you might be approved for payment deferment or reduced payments on a temporary basis. On the flip side, some lenders may tighten criteria for new borrowers applying for credit during hard times in order to mitigate their risk.\nDuring an economic turndown, even if you're struggling financially, it's important to try to protect your credit so you're in good shape when things begin to normalize. To do this, make sure you're continuing to make your payments on time, and reach out to your lenders and utility companies as soon as possible if you know you won't be able to pay on time. You may need to also cut expenses and stick to a tight budget during this time. END