The Government Shutdown and Your Credit

blog-government-shutdownAs “Closed” signs surface across various Federal government offices and sites, it is likely to affect most of us in some manner as the government services we rely on may be temporarily unavailable.


For the overwhelming majority of consumers, this closure will have no effect on your personal credit as most of us do not work for the Federal government and credit related functions are generally managed by private businesses.


You may be impacted, however, if you are in the midst of a securing financing for a home loan. If you are doing a FHA loan, HUD (the U.S. Department of Housing and Urban Development) stated that they will be able to continue processing single family loans during the shutdown.  They did share there will be a limited number of FHA staff available to underwrite and approve home loans which will likely affect the speed of the closing process.  Your best course of action is to interact directly with your mortgage professional regarding your loan application.


Fannie Mae and Freddie Mac, the government-controlled mortgage companies, shared that their operations would be unaffected by a shutdown.


What if you happen to be one of the ~1 million Federal government workers who have been furloughed? 


If the furlough period becomes prolonged such that you think the lack of a steady paycheck will affect your ability to make payments as agreed on your credit obligations, you should reach out to your lenders to make them aware of the situation. Most lenders will want to work with you, perhaps deferring your loan payment, given these unusual and hopefully temporary circumstances. As well, check with your credit union to confirm if they are deferring payments.


Taking these actions may help you maintain the good credit standing you have worked so hard to achieve.


Tom Quinn is the Vice President of Business Development for myFICO® , and has over 20 years of experience working with consumers, regulators and lenders and regarding credit related questions and initiatives.


  1. Patricia K Correia says:

    I am a disabled veteran. It has been decided there is no money to pay disabled veterans November 1st if the the shutdown continues. Talking to lenders does no good. I just last month got the 7 year late payments removed from my report that happened the last time the governent withheld my disability check. I talked to all y lenders then too. All said they would work with me, keep my accounts open, not report any late payments, as long as I paid what I could and kept them informed. They lied. Only one kept the account open but still reported the lates. The rest closed the accounts and continued to report late payments. The effect of the late on my score did not diminish with time but my score raised 50 points when it was removed. Don’t believe you can keep your good credit standing when you lose your paycheck. It just doesn’t happen that way no mater what actions you take. I just got a fairly decent credit standing back for about a month and now it looks like I could lose it all for another 7 years.


  1. […] for the government and are experiencing a non-existent paycheck, as Tom Quinn recently suggested: contact your lenders. If you work with your lenders, they may set up payment deferment options, or already have those in […]

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