Does Being Furloughed Hurt My Credit?

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Content Manager

Bethany Hickey is a Content Manager and Writer for Auto Credit Express, CarsDirect, and many other automotive blogs. She's a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. 

, Content Manager - June 22, 2020

There are many things that can impact your credit score, but your employment status isn’t one of them. So, being furloughed doesn’t hurt your credit, but it can lead to problems if you don’t keep up with your credit in other areas.

Unemployment Status and Credit Reports

A lot of information is available on your credit reports, and your place of employment is sometimes listed as well. However, no matter your income type – earned, social security, furloughed, and/or disability – it doesn’t impact your credit score.

This means a change in your employment status doesn’t lower your score, which is good news to those who’ve been laid off, furloughed, or let go during the COVID-19 pandemic.

What does impact your score, however, is missed payments due to a change in income. Payment history is the most important factor when your credit score is being calculated, making up 35% of your overall FICO score. The biggest concern you should have when it comes to a change of income is keeping up with your bills, loans, and other expenses.

A missed or late payment can stay on your credit reports for up to seven years – which isn’t ideal for your future credit opportunities.

Keeping Track of Your Credit While Furloughed

It's one thing to lose some income and have to sustain yourself on unemployment; it’s another thing to come out the other side of this pandemic and find that your credit score has dropped due to missed payments or higher credit utilization, adding insult to injury. Since these layoffs are so widespread, the credit reporting agencies are expanding the free availability of your reports.

Pre-coronavirus, you could view a copy of your credit reports from TransUnion, Experian, or Equifax just once every 12 months for free. Now, you're allowed a free weekly look at your credit reports through April 2021. These can be requested by visiting

This is huge news for bad credit borrowers, who now have the ability to watch their score rise or fall in almost real time, allowing you to see the direct impact of your actions and spending habits on your credit score.

If you’re concerned about your credit score, or what’s being reported by the credit reporting agencies, now is the time to check them out and work on building your credit.

Your Credit Score Matters to Auto Lenders

Keeping track of your credit score is always a good thing, and it’s especially important during times of financial turmoil, as well as when you’re thinking about taking on new credit such as a car loan.

While you’re furloughed, you’re not likely to get approved for an auto loan with unemployment checks as income, but you can work on improving your credit in the meantime. You can do this in several ways, including: lowering your credit card debt, taking care of negative accounts in collections, combing through your credit reports for errors or discrepancies to dispute, and staying on top of your expenses.

Your credit score matters to lenders, so it should matter to you, too! You can’t be too prepared when you’re considering applying for a new car loan, so let us help.

You can start researching vehicles with us at CarsDirect, all from the comfort of your home. You can compare new and used car prices, and read more about improving your credit score while you shop. Once you're back on your feet and ready to find your next car loan, you can even get in touch with dealerships that offer subprime lending options by filling out our free auto loan request form. Let’s get car shopping!


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, Content Manager

Bethany Hickey is a Content Manager and Writer for Auto Credit Express, CarsDirect, and many other automotive blogs. She's a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. 

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