Late Payments

• When you are unemployed, you may be receiving unemployment benefits, which might not be enough to cover your bills. You may end up making late payments, which can affect your credit score negatively.
  
  

Fees

• Should you make late payments or go over your credit limit as a result of unemployment, then you may be assessed late fees. This will only increase your debt load and the amount of the next payment, which can negatively impact your credit score.
  
  

Higher Interest Rates

• When unemployment forces you to make late payments or go over your credit limit, then your creditors may impose higher interest rates because you defaulted on the original agreement. Your credit rate will suffer if you can't keep up with the payments as a result of the higher interest rates.
  
  

Foreclosure

• If unemployment causes the bank to foreclose on your home, then this will cause your credit score to drop dramatically. A foreclosure will remain on your credit report for seven years.
  
  

Bankruptcy

• If unemployment causes you to file for bankruptcy, this will negatively impact your credit for up to 10 years.