Skip to content
ScoreSense
  • Available Features
    • Credit Scores & Reports
    • Credit Insights
    • Credit Monitoring
    • Identity Theft Monitoring
    • Credit Tools
    • Mobile App
  • Blog
  • In The News
  • Credit Journeys
    • College
    • Military
    • Home Buying
  • Contact
  • FAQs
  • Reviews
  •   Sign In
  • Get My Scores
Main Menu
  • Credit Education
    • Credit Basics
      • Credit Bureaus
      • Types of Credit
    • Credit Scores
      • Credit Score Factors
      • Credit Score Tips
    • Credit Reports
      • Negative Credit Items
      • Credit Report Errors
      • Credit Report Disputes
    • Credit Monitoring
      • Signs of Credit Fraud
      • Credit Fraud Recovery
      • Credit Security Tactics
    • Credit Repair
      • Credit Repair Scams
    • Build Credit
      • Establish Credit for Teens & Students
    • News & Trends
  • Fraud
    • Identity Protection
    • ID Theft
      • Child ID Theft
      • Tax ID Theft
      • Medical ID Theft
    • ID Theft Recovery
    • Data Breaches
    • News & Trends
  • Personal Finance
    • Loans
      • Home Loans
      • Auto Loans
      • Student Loans
      • Personal Loans
      • Business Loans
    • Budgeting
    • Saving
    • Debt
    • Banking
    • Investing
      • 401K & IRAs
      • Stocks & Mutual Funds
    • Taxes
    • Life Events
      • Marriage
      • Parenthood
      • Retirement
      • Divorce
      • Death
      • Bankruptcy
      • Job Loss
      • Natural Disaster
    • News & Trends
  • Credit Cards
    • Interest Rates
    • Denied Credit
    • Card Types
    • Manage Balance
    • News & Trends
  • Credit Tools
    • Credit
      • Monitoring & Alerts
      • Credit Scores & Reports
      • Credit Insights
      • Credit Specialists
      • Score Simulators
    • Identity Theft Insurance
    • Identity Theft Monitoring
    • Sex Offender Monitoring
  • COVID-19
Search

CreditSense > Personal Finance > Life Events > Job Loss > How to Protect Your Credit After a Job Loss

How to Protect Your Credit After a Job Loss

Picture of ScoreSense

ScoreSense

  • April 27, 2020

If you find yourself suddenly or unceremoniously unemployed, take heart. With planning, proactive communication with creditors and a dedication to smart spending, you can protect your credit after a job loss — and safeguard your long-term financial future.

How to Survive Unemployment Financially

Losing your job wasn’t part of the plan, and you’re probably wondering how to survive unemployment financially.

If there’s good news in this scenario, it’s that getting fired isn’t one of the five factors that impact your credit score. However, what will impact your credit score is missing payments.

After your job loss, it’s vital that you review and inventory your spending to categorize necessities and extras. While it’s a bummer to cut the non-essentials, such as dining out or your Netflix subscription, the best way to keep from spiraling down into debt is to cap your spending — and stick with your plan.

Prioritize Secured Debt

Next, prioritize what needs to be paid first, and then include the payment dates in your budget schedule.

Secured debt, which is your mortgage or auto loan, should be your priority. Missing a mortgage or auto loan payment could lead to losing your house or car to voluntary or involuntary repossession, which will stay on your credit report for seven years.

Avoid Taking on More Debt

Even if you’re collecting unemployment, it can be hard to pay the bills. But taking out a loan, asking for a credit card limit increase (and using it all) or opening a new credit card and racking up more debt isn’t recommended for several reasons.

  • More debt, more payments: Payment history is 40% of your credit score, so late or missed payments will drag down your numbers.
  • Your credit utilization ratio skyrockets: More debt impacts your credit utilization ratio, which accounts for 35% of your credit score.
  • Not only will brand new credit cards or loans pile on more debt – if you max them out, they will lower your credit age, which accounts for 10% of your credit score.
  • Hard inquiries increase: Each time you request a new credit card or loan, the creditor or lender conducts a hard inquiry, which accounts for 5% of your credit score. Too many hard inquiries within a short amount of time can damage your score.

Will Credit Card Companies Work With Me If I Lose My Job?

Ideally, make the minimum payment by the due date each month. If you can’t do that, contact your credit card company. They have the ability to work with you on a payment plan. They are most inclined to do so if you have good credit and contact them before your payments are 30 days late.

The payment plan, which is also known as a hardship plan, usually provides benefits like a lower interest rate, lower fees and penalties, smaller minimum payments and a set payment schedule. The specific structure of your hardship plan is set by the creditor’s discretion.

Participating in a hardship plan doesn’t have a negative impact on your credit score, but if there’s a note about it from the creditor on your credit report, it may be interpreted as a warning signal to other creditors and lenders. 

While credit card companies and lenders are often sympathetic and flexible in the wake of a job loss, ultimately, it’s your responsibility to pay back your debt. With a proactive approach to curbing spending, along with a manageable payment plan, you can take charge, protect your credit and secure your long-term financial health.

Smart Moves

Get your credit scores and reports from all three bureaus instantly.

Take Action

Shield your credit and finances with up to $1 million identity theft insurance*.

Get Protected

Find out how your score could change if you pay down a credit card or miss a mortgage payment.

Explore Tools

RELATED

How to Defer Your Mortgage During the Coronavirus Pandemic

Will Losing My Job Because of the Coronavirus Hurt My Credit Score?

How to Tighten Your Budget During the Coronavirus Lockdown

What Should I Do If My Information Is Part of a Data Breach?

Tax Season is High Risk

Why Are My 3 Credit Scores Different?

6 Ways to Spend Less This Holiday Season

What is a Write-off and How is it Different From a Charge-off

You are more than just 1 credit score.
Get your credit scores and reports from all three bureaus instantly.
Get My Scores

What's Your Credit Score?

Get Your credit scores & reports from all 3 bureaus, Instantly!**
Get my scores

Sign Up for Our Credit Newsletter

ScoreSense

  • Have an Account? Sign In
  • 1-800-972-7204
  • Mon-Fri: 8AM to 8PM CT
    Sat: 8AM to 5PM CT
    Sun: Noon to 6PM CT
  • customercare@scoresense.com
  • 3400 N Central Expy Ste #110-298
    Richardson, TX 75080

Company

Contact Us
Terms and Conditions
Privacy Policy
OTL*ScoreSense

 

Facebook Youtube

Features

Credit Scores & Reports
Credit Insights
Credit Monitoring
Identity Theft Monitoring
Credit Tools

Resources

Learn About Credit
What is a Good Credit Score?
Credit Score Range

Mobile Apps

© 2001-2025 One Technologies, LLC. All rights reserved.

ScoreSense® is a trademark of One Technologies, LLC.

Do not sell/share my information |

*Identity Theft Insurance underwritten by insurance company subsidiaries or affiliates of American International Group, Inc. The description herein is a summary and intended for informational purposes only and does not include all terms, conditions, and exclusions of the policies described. Please refer to the actual policies for terms, conditions, and exclusions of coverage. Coverage may not be available in all jurisdictions.

**After verification of your identity, your scores are available for secure online delivery in seconds.

 

Scroll to Top