A criminal record can have a lasting impact on your life, including your credit. Being a felon can make accessing loans, grants, scholarships and other financial services difficult, leaving you with few options for establishing and maintaining a good credit score. According to reports, an estimated 20 million U.S. citizens have a felony in their past as of 2022.
In this blog, we’ll discuss how being a felon can affect your credit score, what you can do to improve your credit if you have a criminal record and tips for managing your finances as a felon.
Understanding Credit Score
Credit scores, the three-digit numbers that play a crucial role in our financial lives, are often misunderstood. They serve as an indicator of our creditworthiness, influencing lenders, landlords, and sometimes even potential employers.
What Contributes To A Credit Score?
Several factors contribute to your credit score, including your payment history, the amount of debt you owe, the length of your credit history, the types of credit you use, and recent applications for new credit.
Felony Convictions: The Basics
Before discussing how a felony affects your credit, let’s first understand what it means to be a felon and the potential implications.
What Is A Felon?
A felon is someone who has been convicted of a felony, which is a crime more serious than a misdemeanor, such as murder, rape, or burglary.
Felon Status And Its Implications
Being a felon can significantly affect various aspects of life, including employment, housing, and voting rights. But does it directly impact your credit score?
Direct Impact Of A Felony On Credit
Contrary to what many might think, being a felon doesn’t directly lower your credit score. However, the circumstances surrounding a felony conviction can indirectly affect it.
Incarceration And Credit Score
While being in prison doesn’t directly impact your credit, it can indirectly affect it. If you have outstanding debts or loans and are unable to make payments while incarcerated, your credit score may decline due to missed payments.
Legal Fees And Credit Score
Legal fees and court costs can also mount quickly during a trial. If these costs are high and you’re unable to pay them, this could lead to debt, which could negatively impact your credit score.
Indirect Impact Of A Felony On Credit
Even after serving time, a felony conviction can indirectly affect your credit score in several ways.
Employment And Credit Score
Securing a job can be challenging for a felon, leading to financial instability. This instability can result in missed bill payments, contributing to a lower credit score.
Housing And Credit Score
Similarly, finding housing can be difficult for felons, leading to potential instability and, consequently, missed rent or mortgage payments, which can lower credit scores.
Rebuilding Your Credit Post-Felony
While a felony doesn’t directly impact your credit, the indirect effects can be severe. However, rebuilding your credit is entirely possible.
Strategies To Improve Credit Score
Regularly checking your credit report, paying your bills on time, reducing the amount you owe, and avoiding new debt can all contribute to rebuilding your credit score. Establishing a stable employment record and maintaining a consistent residence can also positively influence your creditworthiness over time.
Professional Help For Credit Repair
In some cases, you might want to seek professional help to repair your credit.
-
Credit Counseling: Credit counseling agencies can provide advice on managing your debt and developing a budget. These services are often available at low or no cost.
-
Credit Repair Companies: These companies can help you dispute inaccuracies on your credit report, which can increase your credit score. However, it’s crucial to ensure these companies are reputable to avoid scams.
Frequently Asked Questions
Learn more about your credit health as a felon by getting answers to the most frequently asked questions:
Does a felony show up on a credit report?
No, a felony conviction does not appear on a credit report. Credit reports only contain information about your borrowing and paying habits.
Can a felon get a loan?
Yes, a felon can get a loan. However, lenders may consider a borrower’s employment history and income, which can be affected by a felony conviction.
How long does it take to rebuild credit after a felony?
The time it takes to rebuild credit varies based on individual circumstances, including the amount of debt and the person’s ability to make consistent, on-time payments.
Can felons apply for credit cards?
Yes, felons can apply for credit cards. However, approval depends on the lender’s criteria, including credit score, income, and other factors.
Does a felony affect getting a mortgage?
A felony does not directly affect getting a mortgage. However, factors like employment history, income, and credit score, which can be impacted by a felony, are considered by lenders.
Conclusion
Being a felon does not directly affect your credit score. However, the associated circumstances, such as incarceration and legal fees, along with the indirect impacts post-incarceration, can lead to a lower credit score. Despite these challenges, with the right strategies and potentially professional help, you can rebuild your credit score over time.
Are you a felon looking to get back on your feet? Access our resources to learn about grants and scholarships for felons to get the financial assistance you need to pursue your educational and career goals. Visit Get Scholarship to start exploring your options now!
