Does Being a Homemaker Affect Your Credit Score?

The daily tasks of being a homemaker may not require you to handle credit, but this does not mean you have a poor FICO credit score. In fact, you may have a great one. Not having a employer can affect your ability to get certain types of loans, but the credit bureaus can never penalize you for listing your occupation as a homemaker.

Identification

Occupation does not affect any of the variables in the credit score calculation used by most institutions. At one time, the credit bureaus collected data on salary for credit scoring, but this no longer matters in 2011 because verification of income is nearly impossible. The credit bureaus list your previous jobs, but this too does not matter for your credit score.

Employment History

Lenders, especially mortgage providers, care more about your financial background that just whatever the credit bureaus list in your credit history. When the creditors sees you worked as a homemaker for the past few years, he may question your ability to repay a loan. If you claim you currently have a job and this does not match the employment history listed in your credit report, the creditor could use this as a mark against your integrity and deny a loan.

Marriage and Credit History

Marriage brings two people together, but the credit bureaus do not combine credit histories. You may connect your account and your spouse's accounts by becoming joint account holders. When a spouse lists you as a joint holder, you receive any history on the account--good and bad. Should you apply for a loan with a spouse, the creditor looks at both credit histories and likely worries if one of you has a poor credit history or none at all.

Tip

Before applying for any loan, look at all of your sources of income, even if it does not come from a job, such as dividend income. Lenders want to know your debt-to-income ratio as well as your credit score. An income of zero probably disqualifies you for any loan, because the lender assumes you have no way of paying it back.