As we anxiously watch hurricanes hit our southern states, our concern for everyone’s safety and homes is high. Here at WattzOn we can’t help notice that a new paper has appeared that shows how credit scores fall in areas hit by hurricanes. More sad news.

The paper “Financial Vulnerability and Personal Finance Outcomes of Natural Disasters” studies how credit scores change during the months following the disaster for residents in hurricane areas. The work looks at census tract data, from locations within 25 miles of the direct hit of the hurricane, 2010 – 2014. Over 1400 hit/tract incidents are analyzed.

The key findings show a large impact on credit scores. On average, if a resident living within 25 miles of the center of impact from a hurricane had a 700 credit score before the natural disaster, the data show the score would fall to 650 to 660 on average. The impact on credit scores differs by the quality of the prior credit history:


Reduction in Credit Score After Hurricane

(1) Defined as 1% unpaid bills or 10% credit card utilization rate (outstanding balance/max allowed)
(2) Defined as 5% unpaid bills or 40% credit card utilization rate (outstanding balance/max allowed)

Source: “Financial Vulnerability and Personal Finance Outcomes of Natural Disasters” , Kansas City Federal Reserve Board.


As WattzOn works with credit agencies to add utility payment history data to credit files, this research paper reminds us how important our work is, and how significant the impacts of a natural disaster are on personal finances. Especially the most vulnerable.

Our thoughts and prayers go out to those in the path of Harvey, Irma and Jose. Although talking about credit scores doesn’t have the immediacy of disaster relief, this study shows that longer-term work of helping hurricane victims rebuild their credit is an important component of hurricane recovery.