How Does SSI or SSDI Affect My Credit?

woman seated at table researching how ssi affects credit

Receiving payments from the Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) program does not affect your credit. In fact, these benefits administered by the Social Security Administration are part of your financial toolbox that can help you maintain an optimal credit score.

But qualifying for credit and managing debt can be complicated for someone on SSI or SSDI. Here are some things to consider when it comes to how credit, debt and these Social Security programs interact.

SSI and SSDI Benefits Do Not Affect Credit Scores

SSI and SSDI are federal disability insurance programs designed to make sure people living with a disability have an income. Qualification for SSI is determined by a person's age, disability and income, and SSDI qualification is determined by disability and work history.

SSI and SSDI do not affect your credit directly because neither income nor receipt of SSI/SSDI benefits are factors in credit score calculations. Credit scores are calculated based on information in your credit reports; specifically, how you've paid your debts in the past. Credit report information that can impact your credit scores includes:

  • Debt payment history: Your credit report includes credit card and loan accounts, your payment history on those accounts and the amounts owed. Collection accounts also appear on your report.
  • Any bankruptcies: Depending on the type of bankruptcy you file, a bankruptcy can remain on your report for up to 10 years.
  • Recent inquiries: When you apply for a loan or credit card, the lender will likely pull your credit report. This "hard inquiry" can temporarily ding your credit score by a few points. However, you will not be refused credit simply due to a hard inquiry on your credit report.

Just as SSI and SSDI benefits do not impact credit scores, your credit history does not affect SSI or SSDI eligibility. Your credit score and credit history (or lack thereof) are not part of the information needed to apply for disability benefits.

Even though SSI/SSDI and credit scores do not impact one another, it is still important for recipients to be aware of their credit, debt payments and how they may interact with their benefits.

Can You Qualify for Credit on SSI or SSDI?

It may be harder to get approved for credit cards or loans when you're receiving SSI or SSDI because while it is not part of your credit score or credit report, income is typically a factor lenders use to determine eligibility. In 2022, SSI income tops out at $841 per month, while the average SSDI benefit is $1,358 per month, which may not meet the minimum income requirements for some loans or credit cards.

But there are other things you can do, such as maintaining a healthy credit history on any existing credit accounts, to improve your chances of approval.

Making all your debt payments on time and using only a small portion of your available credit on revolving accounts (such as credit cards) are two important factors in maintaining a strong credit score. A low credit utilization rate—the amount of credit you use compared with the amount you have available to you—is key to a good credit score. Aim to keep your credit utilization as low as possible (or under 30%, at least) on each credit card and across all your card accounts; higher utilization can be a red flag to lenders that you may be having difficulty managing the credit you already have.

You can also boost your credit score powered by Experian data by using Experian Boost®ø to get credit for paying bills like your utilities, cellphone and streaming services.

Using Credit on SSI or SSDI

The risk of using credit when living on a fixed income such as SSI or SSDI is making sure you have enough money to cover any loan or credit card payments. For example, if you can only make minimum payments on your credit cards, interest can accrue and balances can grow steadily. It's important to pay on time and in full if possible.

Taking out loans when receiving federal benefits can be complicated due to income and savings restrictions. Making too much money and saving too much can disqualify recipients. For example, if you borrow money using a loan and do not spend it within that month, it will count against the $2,000 resource limit for SSI recipients.

If you become late on your payments, unpaid debts can go into collections. Missed payments and collection accounts are typically reported to the credit bureaus (Experian, TransUnion and Equifax) and can lower your credit score.

Special rules protect Social Security benefits from garnishments by debt collectors, but unpaid debts can still have a serious impact on your overall credit history and financial stability. As a result, it's best to take on debt only when necessary.

The Bottom Line

A credit score is an important financial tool that can help you get approved for a credit card, mortgage, car loan or other credit product. Establishing a good credit history can be especially important for people with disabilities, as it can impact housing opportunities and even insurance premiums. If you are living with a disability and are having trouble making ends meet, there are government and nonprofit programs that may be able to provide financial assistance.

If you're having difficulty establishing a credit history or if you have no credit history, you can jump-start your credit with Experian GoTM, a free membership feature that helps you establish credit and earn a FICO® Score sooner.