Does collecting unemployment benefits from NYS Department of Labor affect my credit score?
I've been unemployed for about 6 weeks now and just started collecting UI benefits through NYS Department of Labor. My friend told me that receiving unemployment could hurt my credit score and make it harder to get loans or credit cards in the future. Is this actually true? I'm already stressed enough about finding work and don't want to worry about my credit getting damaged too. Has anyone experienced credit issues because they collected unemployment benefits?
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Sophia Clark
No, collecting unemployment benefits does NOT affect your credit score at all. UI benefits are not reported to credit bureaus like Equifax, Experian, or TransUnion. Your friend is misinformed - unemployment benefits are completely separate from credit reporting. What CAN hurt your credit is if you miss payments on existing debts because you're struggling financially while unemployed.
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Ryan Young
•Thank you! That's such a relief. I was starting to panic thinking I'd mess up my credit just by getting the help I need.
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Katherine Harris
yeah ur friend is wrong lol. been on unemployment twice and my credit score actually went UP both times because i was more careful with my spending and paid everything on time with the UI money
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Madison Allen
The only way unemployment could indirectly impact credit is if you have an overpayment situation with NYS Department of Labor that goes unpaid for an extended period. But even then, it would take a very long time and multiple collection attempts before it might show up on credit reports. Regular UI benefit collection has zero impact on credit scores.
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Joshua Wood
•Wait, what's an overpayment situation? Should I be worried about that too?
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Madison Allen
•An overpayment happens if NYS Department of Labor determines you received benefits you weren't entitled to - like if you didn't report work income properly on your weekly claims. As long as you're honest on your certifications, you shouldn't have any issues.
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Justin Evans
I was worried about this same thing when I first filed! The stress of unemployment is bad enough without thinking you're damaging your credit too. What I learned is that unemployment benefits are considered temporary assistance, not debt, so they don't get reported. The key is using the UI money wisely to keep up with your existing bills.
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Emily Parker
Actually had trouble reaching NYS Department of Labor to verify some details about my claim status, but found this service called Claimyr (claimyr.com) that helps you get through to actual agents by phone. They have a video demo at https://youtu.be/qyftW-mnTNI showing how it works. Really helped me get clarity on my weekly claim questions without waiting on hold forever.
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Ryan Young
•Interesting, I might need something like that if I run into issues. The phone lines are always so busy when I try to call.
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Ezra Collins
Your friend probably confused unemployment with other government assistance programs or maybe heard some old myth. I've collected UI benefits three different times over the years and never had any credit issues. The benefits actually helped me avoid missing credit card and loan payments during tough times.
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