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Being unemployed doesn’t automatically disqualify you from getting a credit card. Credit card issuers are more interested in your income than your job. They also look at your credit history, credit scores and existing debt.
Even if you don’t have a job, you can still meet the income requirement by declaring on your application any available income. Even if your income comes up short, rest easy. You still have options to build or maintain credit.
Losing your job can be a stressful and uncertain time. Many questions and concerns come to mind, especially about your finances. One of the most common questions is: Do credit card companies know if you’re unemployed?
The answer is a bit complicated. Credit card companies have access to information that may obliquely reveal your employment status, even though they are unable to determine whether you are unemployed.
Here’s what you need to know:
What Credit Card Companies Can See:
- Credit Reports: These reports contain information about your credit history, including your past and present employers. However, credit reports don’t explicitly state whether you’re currently employed.
- Income Verification: When you apply for a credit card, you’ll usually be asked to provide proof of income. This could be your pay stubs, tax returns, or bank statements. Credit card companies use this information to assess your ability to repay the debt.
What Credit Card Companies Can’t See:
- Unemployment Benefits: Whether you receive unemployment benefits is not a public record and won’t be listed on your credit report. So, credit card companies won’t know if you’re receiving benefits unless you tell them.
What This Means for You:
- You can still apply for credit cards even if you’re unemployed. However, it’s important to be honest about your income and employment status when you apply.
- Credit card companies may be more cautious about approving your application if you’re unemployed. They may require a higher credit score, a larger down payment, or a cosigner.
- If you’re struggling to make ends meet, it’s important to talk to your credit card companies. They may be able to work with you to create a payment plan that fits your budget.
Here are some additional things to keep in mind:
- Your credit score is not affected by your employment status. However, if you’re unable to make your credit card payments on time, your credit score could be negatively impacted.
- There are resources available to help you manage your finances if you’re unemployed. You may be eligible for unemployment benefits, government assistance programs, or debt relief programs.
Here are some frequently asked questions about credit cards and unemployment:
Q: Can I still get a credit card if I’m unemployed?
A: Yes, you can still apply for credit cards even if you’re unemployed. But when you apply, it’s crucial to be truthful about your earnings and work situation. If you’re unemployed, credit card companies might be less likely to approve your application; therefore, you might need to have good credit, make a larger down payment, or have a cosigner.
Q: What happens if I can’t make my credit card payments?
A: If you’re unable to make your credit card payments on time, your credit score could be negatively impacted. You may also be charged late fees and interest. It’s important to talk to your credit card companies if you’re struggling to make ends meet. They may be able to work with you to create a payment plan that fits your budget.
Q: Are there any resources available to help me manage my finances if I’m unemployed?
A: Yes, there are resources available to help you manage your finances if you’re unemployed. You may be eligible for unemployment benefits, government assistance programs, or debt relief programs. You can also find helpful information and resources on the websites of organizations like the National Foundation for Credit Counseling (NFCC) and the Consumer Financial Protection Bureau (CFPB).
Additional Resources:
Apply for a secured credit card
Secured cards require a security deposit as collateral in case you dont pay your bill. The amount you deposit determines your credit limit. Generally speaking, getting approved for a secured card is simpler than for an unsecured one because of the deposit, and the income requirements might be looser. You get your deposit back when you close the account or upgrade to a regular credit card.
Become an authorized user on someone’s credit card
A friend or family member can make you an authorized user on their account. You’ll get a card with your name on it that’s linked to their account. They will be responsible for making the payments. You can work out an agreement with them to decide on a spending limit and payment plan. Stick to the plan to avoid hurting the primary cardholder’s credit score. Youre now tied to their credit score, so it could affect you, too. Some card issuers report an authorized users credit activity to credit bureaus.
A number of so-called “alternative credit cards” have entered the market recently, promoting unconventional underwriting procedures to determine creditworthiness (apart from analyzing FICO scores alone). You will still need to meet income requirements, just like with traditional credit card issuers, even though these cards might be good options for people with bad or no credit.