Does claiming Benefit affect your Credit Rating?

CatB_2

Sorry if I've missed this but I couldn't find it anywhere online - does claiming housing benefit and council tax benefit get a black mark on your credit report?

I'm in a situation where for the next 3 months I will have no income and have to pay my rent and support myself but after that I should be in a position to get a decent job. I have just enough savings to survive on for those 3 months but I would be eligible for some housing and council tax benefit which would obviously mean me loosing less of my savings and much less financial stress.

However, I am worried that this will affect my credit rating when I start work and want finance and one day maybe even a mortgage. Given that I will probably receive relatively little in benefit it might mean that it just isn't worth it if it does affect me in the future in this way.

Any information would be appreciated.

donnalove

benefit claims have nothing to do with your credit files. they are not credit.

lil_me

Your income from benefits would not effect your credit rating. When you apply for credit if still on benefits then may effect if they would give you credit or not.

CatB_2

Thanks very much. I was just a bit worried as at the moment I imagine banks will use all the info they can to avoid loaning you money!

Voyager2002

CatB wrote: »

Thanks very much. I was just a bit worried as at the moment I imagine banks will use all the info they can to avoid loaning you money!

I certainly hope that Banks (and private companies generally) do not have access to government information about us, such as details of benefit claims!

mitchaa

Voyager2002 wrote: »

I certainly hope that Banks (and private companies generally) do not have access to government information about us, such as details of benefit claims!

They wouldn't need to, as when you apply for credit you would have to inform any lender of your employment status, income and where you get it from.

Every credit/loan application i have ever taken out, requires this info.

So in the matters of taking out credit you would have to inform them of being on benefits.

Stating your unemployed on a credit application is hardly a good start and i would imagine even if your credit rating is clear, you would still likely be refused or offered an extortionate rate.

lil_me

Your bank would know because the payments usually go into bank accounts, the payment would show as DWP then whatever benefit it is IS/CA/DLA etc then the NI number. HB payments is usually the council name etc. So no there wouldn't be a way of lying about where your income came from usually.

A friend of mine who is self employed tripped herself up recently when applying for a loan, told the bank she earned more than she does then was asked 'So why is your tax credit award so high?' the payments went into her bank account, didn't take the bank manager long to realise that to get such high tax credits she must be telling them/providing evidence that she is being paid less than she said, needless to say she got turned down.

On the other hand I know many people who have lied blatently about earnings/income and been given the credit.

Anyway like I said it only effects what you apply for while in receipt of benefits, but for after you have claimed when you are then employed, shouldn't make a difference.

CatB_2

Thanks guys.

I'm interviewing for jobs at the moment so hopefully I won't be on this benefit for more than 3 months and won't be applying for loans etc while I'm on it. I was more concerned that the banks would look back and see that I had been paid it previously and consider that that meant I was somehow higher risk.

Anyway, the forms have all gone off so now I just have to wait and see what they decide I am entitled to.