The average person has a 5.1 percent chance of doing time in a state or federal prison, according to the U.S. Department of Justice. Going to jail can affect finding gainful employment but not a credit score. People with a criminal record are not totally in the clear, because even minor crimes can prevent you from getting a loan. If a criminal past makes you not creditworthy, you might be able to "hide" this information.
The credit rating agencies are legally allowed to include criminal records when calculating credit scores, but they have had a longstanding practice to exclude them from reports and score calculations, according to the Privacy Rights Clearinghouse. Only certain public records, such as judgments, tax liens and tax levies, count against a consumer's credit score.
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It Might Affect Credit Applications
Large or risky loans may result in the bank delving deeper into the applicant's past than with most other lines of credit. Business loans usually require the borrower to have good character. This usually means a clean criminal record. The loan officer could use the presence of misdemeanors, which stay on a person's record for life, to deny an application for credit.
Lenders and other entities that perform background checks may use a consumer report, which can list criminal convictions. Employment background checks and insurance reports are the most common "consumer reports" that can affect your life when you have a criminal past.
Civil infractions, such as jaywalking and speeding tickets, leave your criminal record as soon as you pay the fine. Consumers with a misdemeanor or more serious crime might be able to seal their records--effectively preventing anyone from learning about the offense. The process of expunging a criminal depends on state law, but usually you can only be a first-time offender and must wait at least a year before starting the process.
Civil infractions could affect your credit score, because some local governments send outstanding fines to debt collectors. Once a fine goes to a collections agency, it will become public record and affect your credit, probably by about 100 points, according to CNN.
- U.S. Department of Justice: Lifetime Likelihood of Going to State or Federal Prison
- Privacy Rights Clearinghouse: How Private Is My Credit Report?
- Loan.com: Bank Requirements For A Business Loan
- Free Legal Advice Help: How Long Does A Misdemeanor Stay On Your Record ?
- CNN: 5 Ways to Destroy Your Credit
- Find Law: Expungement and Criminal Records: State-Specific Information