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Your Credit Score Is Not A Reflection Of You


We often hear we need good credit to take out loans and buy a home, but we do not know the factors affecting our credit score and how to maintain it. In this post, you will learn what you need to know about credit scores and why your credit does not reflect who you are.


What is a credit score?


A credit score is a number that ranges from 350-800 based on how you have used a line of credit in the past. Lenders use your credit score to see the risk of letting you borrow money and determining the interest rate and terms they will offer.


Understanding the different components that affect your credit score is important to improve it.


Key factors affecting your credit score:


  1. Payment history (35%): Making timely payments on credit accounts such as credit cards and loans significantly boosts your credit score. Late payments, defaults, or bankruptcies can affect your payment history for five to seven years.
  2. Credit utilization (30%): This ratio compares the balance you have used to your credit limit. Keeping your credit utilization to 30% and under will prove you know how to manage your credit.
  3. Length of credit history (15%): The longer your credit history, the longer creditors can assess your credit management. Keep your oldest credit card open even if you only use it once a year and pay the amount in full.
  4. Types of credit in use (10%): A mix of credit accounts such as credit cards, loans, and mortgages makes up this percentage. Remember to only apply for credit when necessary.
  5. New credit (10%): Opening new multiple credit cards can be considered risky in the eyes of lenders and can affect your credit score.


How to check your credit score?


Checking your credit score is crucial to understand your financial standing.


You can check your credit score for free from different credit bureaus or financial institutions. Some credit cards also provide this information at no cost to the customer.


How to improve your credit score?


  1. Pay bills on time: Make payments by the due date or before.
  2. Reduce credit card balances: Aim to keep your balance under 30% of your credit limit.
  3. Avoid opening unnecessary credit accounts: Only apply for credit when needed, and be careful about opening more than two accounts within a short time frame.
  4. Review your credit report: Regularly check your credit report for errors or inaccuracies and dispute discrepancies you find.


Your credit score is not a reflection of you:


A low credit score does not make you a bad person. A low credit score does not mean you are bad with money. The scoring makes us think we are failing, and we can often compare it to school grading.


Here is why you are not failing: because this topic was not covered in school and purposely so because the system wants to make themselves rich by us paying interest and late fees every month. You did not have the appropriate information, nor did you have the tools.


You might also have a low credit score because you were struggling financially, emotionally, or mentally. You were trying your best at that time to cope with your emotions.


Here is the thing: it is never too late to repair your credit, and if you are reading this, you are on the right path.


This is your reminder: You are not a bad person because you have a low credit score, and you are not bad with money. You simply did not have the tools and education.


When we work together:


  • I help you unpack your money story and rewrite your own version of your story
  • I help you create a plan to increase your credit score and pay off debt
  • I help you feel lighter and joyful without constantly feeling guilty due to your debt


If this resonates with you, I invite you to work with me!


I want to help you navigate your finances by giving you the tools and education that schools lack. Book a sales call.


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Orlenda Cortez

Welcome to my corner on the internet! I’m obsessed with using money as a tool because it led me to pay off $30K in consumer debt in a year and a half, helped me save $20K in nine months to have my dream wedding in Costa Rica and is helping me build the life I never saw my family experience. Now I want to help others do the same!

Orlenda Cortez
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