Does filing for unemployment affect your credit score? | Chase (2024)

FAQs

Does filing for unemployment affect your credit score? | Chase? ›

Filing for unemployment isn't bad for credit

But there's one thing you don't need to worry about: Filing for unemployment has no direct impact on your credit score. Credit bureaus and card issuers cannot see if your salary and income has changed, or if you've filed for unemployment, unless you give them explicit permission (which isn't common).

While creditors may use your employment history to help verify your identity when you're applying for a loan or other types of credit, it doesn't factor into your credit score.

Do credit card companies know if you are unemployed? It depends. Credit card companies are usually more interested in a customer's income than employment status, but they do use employment as one means of qualifying income. However, they won't know specifically about unemployment unless a customer informs them.

You'll need to show proof that you have a steady source of income to qualify. If you can't show a source of income, such as a job, you'll need to have a cosigner on the card or ask to be an authorized user on a friend or relative's credit card.

California, Connecticut, Hawaii, Illinois, Maryland, Oregon, Vermont, Delaware, Nevada, Colorado and Washington ban employers from discriminating based on credit in most cases. All 11 states with bans have exceptions. A common one is for jobs at financial institutions or that require handling money.

Your complete employment history is not included in a credit report. Past and current employers may appear on your credit report, but only if you listed them on a loan or credit card application. Typically, if a lender wants your employment history, they will ask you for it directly.

Your credit score won't be affected by a potential employer conducting a credit check on you.

Employers don't get a credit score during this process, and thus there is no minimum credit score for employment.

If you want your credit reports to state a new name, address or employer, get in touch with your creditors and ask them to change their records. Your addresses, names and jobs aren't factored into your credit scores, but it's better to be prudent and keep your information up-to-date.

Does being unemployed affect credit card approval? ›

Unemployment doesn't have to be a barrier to credit card approval if you have good credit and a source of income you can use to pay the bills. But whether you're unemployed or you have a job, use your credit card wisely.

Though credit reports are not directly impacted by employment, being unemployed can make it difficult to get a loan. When you apply for new credit, creditors will want to know your employment status and income to make sure you can afford to pay back the debt.

Credit card issuers will generally ask about your employment status and total gross annual income on a card application.

That said, it is one of the more premium card issuers. For most Chase credit cards, you need at least good credit to be approved, which is a credit score of at least 670. A score of 740 or higher bumps you into the “very good” credit range and gives you an even stronger chance at approval.

The average credit card balance is $6,501

A recent The Motley Fool Ascent research study examined the average American household's debt. Unsurprisingly, many Americans have debt. According to data from Experian, the average credit card balance in the third quarter of 2023 was $6,501, up from $5,910 in 2022.

While there isn't a specific income requirement for a card, evaluating your access to income allows a bank to determine your credit health and whether or not they want to lend you money based on their confidence in your ability to make your payments.

However, income can help you pay your bills, which contributes towards your payment history. So, you can still establish credit without a job. If you're able to make your bills on time, you'll be contributing towards your payment history—a highly weighted factor that goes into generating your credit score.

Does an employer credit check hurt your credit score? Your credit score won't be affected by a potential employer conducting a credit check on you. “An employment inquiry is treated like a soft inquiry,” Ulzheimer says. “Not visible to other parties (other than you) and not considered in credit scoring systems.”

Card issuers sometimes ask you to verify your income, which you may be able to do by submitting copies of income-related documents, such as a tax return or pay stub.

The CPS report doesn't take into account whether or not workers are employed full-time, if they are underemployed, or if a worker has given up job searching.