What Happens to Your Credit Score if You Land in Prison?

If you go to prison, it will impact many aspects of your life including your finances and credit. Here are the key things to know about being incarcerated and your credit:

Does a Prison Sentence Show on Your Credit Report?

No, prison or jail time served isn’t included on a credit report. There is a section for public records, but arrests, misdemeanors, and other non-financial legal issues don’t appear here. The public records that can appear on your credit report include bankruptcies and civil judgments.

How Your Credit Score Can Drop While You’re in Prison

While being in prison for a period of time doesn’t directly impact your credit, there is a way your credit score may go down when you’re in jail. Late payments are a significant factor in most credit scoring models, including the FICO^® Score, which is used by 90% of lenders. Payment history makes up 35% of your FICO Score, so if you fall behind on credit card or loan payments while in prison, then your credit score may take a dive. Also, late payments stay on your credit report for seven years. The impact of a late payment on your credit score can linger for a while.

While you’re in prison, you must still pay any bills or debts owed just as you usually would unless you’ve contacted your financial institution and cardholders and have a special payment plan set up. Be sure to get any specific instances documented so you can keep track of the specifics for when you’re out of prison.

How Can You Avoid Damaging Your Credit While in Prison?

If you don’t pay off any credit card debts before going to jail, you may end up with late payments racking up while you’re incarcerated. Your best bet is to get your financial accounts in order before your sentence begins.

Also, it’s a good idea to have a trusted family member or friend help manage accounts while you’re in prison. Check with your specific financial institutions, lenders, and creditors to see what documentation or information they need from you. You may need to sign a power of attorney so someone else can manage your specific financial details and accounts.

You don’t want to close your credit cards since those accounts will continue to build a credit history while in prison. However, your credit score could also be negatively impacted if your credit card issuer cancels your card for inactivity. Some credit card issuers require activity every so often, so they may close an account after a year of no usage.

Some credit card issuers also may cancel a card if they learn you’re incarcerated. Unfortunately, a credit card issuer can cancel an inactive account without any notice. If one of your cards is canceled, your score could drop because it impacts your credit history and utilization.

If you have good credit before you go to prison, your credit likely won't be impacted much by your incarceration.

How Your Credit Score Can Go Up While You’re in Prison

There is a way that your credit score may actually go up while you’re in prison. If you pay off all debts and don’t have new items hitting your credit card, your credit utilization will remain low, and you won’t have any late payments so your score could continue to rise over time.

Also, the impact of negative items on your credit score reduces over time. More recent items usually impact your credit score by a higher number of points. Because of this, if you’re in prison and nothing that’s negative is getting added to your credit report (like another late payment), then time is passing since any delinquency or late payment, and your score will likely start to go up.

What Happens if You Have Credit Card Debt When You Go to Prison

As mentioned before, you still have to pay credit cards even when you’re in prison, so credit card debt doesn’t just go away. You’re still responsible for any credit card debt (just as you are before and after your release). Too much credit card debt does negatively affect your credit score. Debt collectors may also still contact you while you're in prison if you fall too far behind and anything is sent to collections.

You must also continue paying other debts like student loans while in prison unless you make arrangements with your lender. You may be able to get payments deferred with either forbearance or income-driven repayment programs. Most likely, you will need to provide documentation that you’re in prison to qualify for deferred payments on your student loans. You can do this with an email from the warden or a letter on their official letterhead.

Avoiding Identity Theft While in Prison

Identity theft can lower your credit score since it often means credit card debt or loans accumulating in your name. The Consumer Financial Protection Bureau (CFPB) has a tip sheet for individuals in the criminal justice system to protect their identity. There are some actions you can take before you’re incarcerated such as freezing your credit. Freezing your credit is completely free. You will need to contact each of the three major credit bureaus separately to freeze your credit reports with each of them.

A credit freeze, while you’re in prison, ensures that no new accounts can be opened in your name. When you’re released, if you need to open a new credit card or apply for credit you will need to temporarily unfreeze your credit reports with each of the three bureaus for a lender or creditor to get access to your credit files.

How to Check Your Credit Report While You’re in Prison

Regularly checking your credit report is part of maintaining healthy credit and finance habits. This is because it allows you to:

• Have a full view of your credit file and what information potential lenders will see when you apply for new credit.
• See if there’s any information or accounts that aren’t yours on your credit report. They could be a potential sign of identity theft.

While checking your credit report during your sentence is a bit more difficult, it is possible. Experian provides details on how to check a credit report while in prison on their website. The steps for an inmate to take to check his or her credit report include:

• Mail in a request for a credit report. The request should include the inmate’s full name, previous mailing addresses, date of birth, and Social Security number.
• Provide a notarized letter from the warden or other authorized personnel verifying the prison as the inmate’s place of residence. The letter should be on the correction institution’s letterhead and include the inmate’s number.
• If the inmate believes he or she has been the victim of identity theft, the request should mention that. Then an initial security alert (also known as a fraud alert) can be placed on the credit file. This alerts creditors that the account is potentially a case of identity theft. Then, they know to contact the requester before opening a new account or extending credit.
• Mail the request and notarized letter to:

Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281

So, while your credit score may be impacted if you land in prison, preparing yourself financially before going to jail is the best way to reduce the chance of any negative credit changes. Learn more here about increasing your credit score and other credit facts.