The decision to go on Social Security Disability Insurance or SSDI should never be taken lightly. It affects your ability to work, affects your finances, and affects what programs you might qualify for. Does being on disability affect your credit too? Tabak Law is here with the answers you need.
Will Going on SSDI Make Your Credit Score Go Down?
Going on SSDI will not directly affect your credit score. Your credit score calculation essentially looks at three things, your debt payment history, recent credit inquiries, and any bankruptcies on your record within the last 10 years.
You’ll notice that not only did we not mention SSDI, but we did not mention income at all. It is a common misconception that income has a direct impact on your credit score. Instead, income has an indirect impact as people with lower income tend to be more likely to have issues with bankruptcy and in their debt payment history.
The issue that many who go on SSDI run into is that often the road to get there can be a rocky one. You can no longer work, so your income is restricted, you are also not getting SSDI benefits yet because you can be hung up in the application process for months. During this time, most individuals and families call in favors, rely on local programs, and juggle bills.
Unfortunately, this process can often lead to debts going unpaid and can even result in bankruptcy. Not only is it important to seek whatever help you can from your family and your community, but also from your debt holders. If you are proactive and honest with your debt holders, many will have relief programs that can reduce or even forebear your debt obligations while you try to secure benefits.
Read More: What Disabilities Are Hard to Prove for SSDI?
Can You Still Qualify For Credit on SSDI?
Even though your credit score should remain unaffected by receiving SSDI so long as you manage to keep up with your bills in the process, you still may find that it is harder to qualify for credit.
This is because being approved for credit, whether it is a loan, an increased credit limit, or some other form of credit, is not solely based on your credit score, it is also based on your income. In most cases, going from being employed to being on SSDI will result in a decrease in your monthly income which will make it harder to be approved for any credit.
To combat this, ensure that during the application process, you do whatever you can to stay current on all of your bills and continue to build or at least maintain your credit. Responsibly using a credit card can also help build your credit.
Official SSDI Cost-of-Living Adjustment Increase for 2024
Get Legal Help With SSDI Benefits
If you are stuck trying to apply for SSDI then it may be time to seek legal help. Many people face denial letters when they apply which forces them to go through a long and arduous process to seek benefits. Having a lawyer on your side, especially one who is heavily experienced in Social Security law, will help you immensely.
Tabak can review your case for free. In fact, even if we take your case on, we will expect no payment unless we win. If we do win your case, we will take our payment only as a percentage of your back pay. Don’t waste time, reach out to Tabak today for a free case review.
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