Building credit while living on disability benefits can feel like an uphill battle, but it's absolutely possible—and having good credit can open doors to better housing, lower insurance rates, and financial flexibility when you need it most.
In this article, we'll cover:
- Whether you can qualify for credit while on disability benefits
- How lenders view SSI and SSDI income
- The best credit-building options for people on fixed incomes
- How credit cards and lines of credit affect your SSI benefits
- Strategies for building credit safely without taking on risky debt
Can You Get Credit While on Disability?
Yes, you can qualify for credit cards and lines of credit while receiving SSI or SSDI. Lenders cannot discriminate against you because your income comes from disability benefits—they must consider it just like any other income source.
However, qualifying depends on factors like your credit history, debt-to-income ratio, and the amount of your benefits. Because disability income is often modest, you may qualify for lower credit limits or face higher interest rates than borrowers with higher incomes.
How Lenders Evaluate Disability Income
When you apply for credit, lenders will ask about your income. You can list your SSDI or SSI benefits as income on applications. Be prepared to provide documentation such as your benefit verification letter, bank statements showing deposits, or your SSA-1099.
Most lenders want to see stable, ongoing income—and disability benefits actually fit this well since they're consistent and reliable. Some lenders are more experienced working with disability recipients than others, so shopping around can help you find better options.
Best Credit-Building Options on a Fixed Income
Secured credit cards are often the best starting point. You make a deposit (typically $200-500) that becomes your credit limit. Your payment history gets reported to credit bureaus, building your credit over time. Many secured cards eventually convert to unsecured cards and return your deposit.
Credit-builder loans work differently—the lender holds the loan amount in an account while you make payments. Once you've paid it off, you receive the funds. Your on-time payments build your credit history without the temptation to overspend.
Authorized user status is another option. If a family member with good credit adds you to their card, their positive payment history can boost your credit score. You don't even need to use the card.
How Credit Affects SSI Benefits
For SSI recipients, there's an important distinction: available credit doesn't count as a resource, so having a credit card won't affect your benefits. However, if you take a cash advance or have a positive balance on a prepaid card, that money could count toward your $2,000 resource limit.
Using a credit card and paying it off each month is actually SSI-friendly—you're using credit rather than accumulating cash resources. Just be careful not to carry balances you can't afford, as interest charges can quickly spiral on a limited income.
SSDI recipients have no resource limits, so credit has no impact on benefits regardless of how you use it.
Building Credit Safely
The key to building credit on disability is starting small and being consistent. Choose a secured card with no annual fee, make small purchases you can pay off in full each month, and never charge more than you can afford.
Avoid high-interest products marketed to people with poor credit or limited income. Payday loans, high-fee credit cards, and rent-to-own arrangements can trap you in debt cycles that are hard to escape on a fixed income.
Check your credit reports annually at AnnualCreditReport.com to monitor your progress and catch any errors that could hurt your score.
Your financial future matters. Purple helps SSI and SSDI recipients manage their money with a checking account designed around your needs.