Having good credit is important for securing loans, renting an apartment, and even getting better rates on insurance. But if you rely on Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI), you may wonder if you can build or improve your credit score.
The good news? Yes, you can build credit while on disability! This guide will show you how to establish, improve, and maintain good credit without risking your benefits.
1. Does Being on Disability Affect Your Credit Score?
Your SSI or SSDI status does NOT affect your credit score. The FICO credit scoring system does not consider disability benefits as a factor. However, low income and limited credit activity can make it harder to build or maintain good credit.
Key Takeaways:
✅ Receiving SSI or SSDI does NOT hurt your credit
✅ SSA does not report benefits to credit bureaus
✅ Lack of credit history can make it harder to get approved for loans or credit cards
📌 Solution: By using credit-building tools, you can improve your credit score over time.
2. Best Ways to Build Credit While on SSI or SSDI
If you have low or no credit, here are the best ways to start building credit safely:
A. Open a Secured Credit Card 💳
Secured cards require a small upfront deposit (usually $200–$500), which acts as your credit limit.
Use it for small monthly expenses and pay it off in full.
Over time, your responsible use can lead to a higher credit score.
Best options: Capital One Secured, Discover It Secured, OpenSky.
📌 Tip: Choose a secured card that reports to all three credit bureaus (Experian, Equifax, TransUnion).
B. Use a Credit Builder Loan 🏦
A credit builder loan is a small loan (usually $300–$1,000) held in a savings account while you make monthly payments.
Once paid off, the money is returned to you, and the payments boost your credit history.
Best options: Self, CreditStrong, local credit unions.
📌 Tip: Look for credit builder loans with low interest rates and no early payoff penalties.
C. Report Rent & Utility Payments to Credit Bureaus 🏠
Rent and utility payments don’t automatically show on credit reports, but you can add them manually.
Services like Experian Boost, RentTrack, or eCredable help turn monthly bills into positive credit history.
📌 Tip: Only use services that don’t charge high fees to report payments.
D. Become an Authorized User on a Trusted Person’s Credit Card 👥
A family member or close friend can add you as an authorized user on their credit card.
Their positive payment history is added to your credit report, helping boost your score.
You don’t need to use the card—just being listed as an authorized user helps.
📌 Tip: Only choose someone who has good credit and pays bills on time.
3. How to Maintain and Improve Your Credit Score
Once you’ve started building credit, here’s how to keep it growing:
✅ Always make payments on time – Late payments hurt your score the most.
✅ Keep credit utilization low – Try to use less than 30% of your credit limit.
✅ Don’t apply for too many new accounts – Each application temporarily lowers your score.
✅ Check your credit report for errors – You can get a free report at AnnualCreditReport.com.
✅ Use Purple to track finances – Stay on top of payments and budgeting.
4. Will Having Credit Affect My SSI or SSDI Benefits?
If you’re on SSDI, building credit does NOT affect your benefits at all.
If you’re on SSI, you need to be mindful of asset limits:
You cannot have more than $2,000 in countable assets ($3,000 for couples).
Credit cards do NOT count as assets, but savings accounts and cash do.
ABLE accounts can be a good way to save money while protecting your SSI eligibility.
📌 Tip: If you receive a lump sum (like a loan refund), spend it on necessary expenses before the next month so it doesn’t count as a resource.
5. Start Building Credit the Smart Way with Purple
Managing finances on disability can be challenging, but Purple helps you track income, spending, and credit-building progress.
💜 Ready to start building your credit? Get started with Purple today and take control of your financial future!