Thursday, June 12, 2014

What Happens to Your Credit When You Go to Prison?

For most convicts, credit is a non-issue. They've got bigger things to worry about. Your credit scores, however, are a huge part of your day-to-day life whether you realize it or not. Credit scores, for example, determine whether or not you'll have to pay a hefty deposit to have utilities hooked up in a new home or get a cell phone contract. These and other mundane things are a crucial part of restarting your life after a prison stay. Your credit report and scores, however, can go through big changes as the result of a lockup. Just because you have decent credit now doesn't mean you still will after you're released. 

What Happens To Your Credit in Prison?

The standard credit reporting period--the amount of time an entry can appear on your credit report--is seven years for most debts (Chapter 7 bankruptcy, unpaid tax liens and civil judgments are an exception to this rule). Once the credit reporting period on an item expires, the credit bureaus automatically delete it from your credit report and it no longer factors into your credit scores. 

In the outside world, your credit is in a constant state of flux. Accounts drop off of your credit record while
Prison can erase your credit history.
new accounts are added.. The credit reporting period for your debts doesn't freeze just because you're incarcerated, but you are unable to open any new accounts. Over time, this can result in your credit history vanishing entirely--especially if you're sent up the river for a long stay. Numerous convicts have gotten released from prison only to discover that simple tasks like renting an apartment have become next to impossible. Landlords willing to take a chance on an ex-con with no credit are few and far between. 

Credit Score Changes as Items Age

The degree to which any entry on your credit report affects your scores depends on a variety of factors, but the amount of time that has passed since "last activity" on the debt plays a large role. While you're in prison, you aren't capable of managing your own debts and those accounts begin to age. The bad news is that positive accounts that you paid in a timely manner, such as a credit card that you paid on time every month and hopefully had the sense to close before you entered prison, will lose its ability to prop up your credit scores as the years go by. 

The good news is that negative entries, such as charged off credit cards and collection accounts also age. As their impact on your credit scores decrease, your credit scores could possibly improve while you're in prison. This is overwhelmingly uncommon, but it can happen. 

Leaving Prison With No Credit

When you get out of prison, the best way to check on your credit is to pull your annual free credit report. The only federally-approved site for free credit reports that doesn't require you to input a credit card number is If the system cannot find your file, you'll know that your credit history has vanished during your imprisonment. You can pull all three of your credit reports once each year. Each credit report may contain different information, so its possible that at least one of the credit bureaus still has a credit report on file for you. Otherwise, you'll need to rebuild your credit from scratch after being released from prison. 

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