Your Credit Score Is Your Financial Reputation — Don’t Let It Get Sloppy

When was the last time you checked your credit score? If you can’t remember, you’re not alone — but that’s a problem. Too many women are walking around with no idea what their credit looks like until they need it. And by then? It’s too late to fix it quickly.

Your credit score isn’t just some random number lenders made up to stress you out. It’s your financial reputation. It determines whether you can rent that apartment in the neighborhood you want, finance a reliable car, qualify for that remote job that requires a background check, or handle an emergency without asking someone for help. Good credit gives you options. Bad credit keeps you stuck.

Did you know that women couldn’t get credit cards without a man’s signature until 1974? Yes sis, 1974. Women couldn’t open a credit card, get a mortgage, or take out a loan in their own name. The Equal Credit Opportunity Act guaranteed women the legal right to obtain credit in their own name — just a few decades ago.

So not only is your credit score your financial reputation, it’s also a reflection of a freedom your foremothers had to fight for — the right to participate fully in the financial system. It grew out of the broader women’s rights movement: the push for financial independence, equal access to banking, and the ability to make major money decisions without needing a man’s signature. Protecting your credit score isn’t just about numbers on a screen. It’s about keeping financial doors open for yourself — options and opportunities that generations before us simply didn’t have.

Where Your Credit Score Comes From — and Who’s Watching

So here’s how it works. There are three major credit bureaus: Experian, Equifax, and TransUnion. These companies collect information about your credit activity from lenders, credit card companies, and other financial institutions. Think banks, mortgage companies, student loan servicers — anyone you’ve borrowed money from or have a credit relationship with. They use that data to generate your credit reports and scores.

Your credit score is calculated based on five main factors: your payment history (35%), how much of your available credit you’re using (30%), how long you’ve had credit (15%), how many new accounts you’ve opened recently (10%), and your mix of different types of credit (10%). These factors create a three-digit number that lenders use to decide whether to approve you — and at what rate.

Credit scores range from 300 to 850. A score of 670-739 is considered “good,” 740-799 is “very good,” and 800+ is “exceptional.” Anything below 670 falls into “fair” or “poor” territory — and that’s where things get expensive and complicated.

Each bureau may have slightly different information about you, which is why your score can vary a bit between them. And when you apply for a loan or credit card, lenders pull your report from one or more of these bureaus to decide whether to approve you.

Here are the stats: about 70% of Americans have good or better credit (670+), which means they qualify for better rates and have real options when they need them. But nearly 30% are stuck in poor-to-fair territory where their choices are seriously limited — and they’re paying more for everything that requires credit.

What Your Credit Score Really Controls

Fast forward — now you’re grown and you’ve built a credit score, maybe from your first credit card, student loans, financing a car, or even a store credit account. But once that score exists, how does it actually affect you?

Your credit score determines whether you can qualify for a home loan at a competitive interest rate, finance a car, land certain jobs (many employers review credit reports, particularly for financial or sensitive positions), or get approved to rent an apartment without a co-signer. It affects your insurance rates, your ability to get approved for business loans, and whether you can handle an emergency without maxing out high-interest credit cards. Good credit means you qualify for what you want at the best rates. Bad credit means you pay more — or get denied entirely.

Why It Matters — Your Credit Score Creates Your Options

Good credit means you likely can make purchases at better interest rates. Why? Because lenders give better interest rates to borrowers who have shown they can manage debt responsibly. A high credit score implies that you have a history of paying your debts back on time or in the agreed-upon manner. See — this is where reputation comes in! That means you can qualify for the loan to buy a new home at a competitive interest rate, or get approved to rent an apartment without a co-signer. You can finance a reliable car without a co-signer or get approved for a personal loan at a reasonable rate instead of turning to predatory lenders or maxing out high-interest credit cards.

Bad credit? Now that’s different. Bad credit means paying more for everything — higher interest rates, having to put down deposits that aren’t required for people with good credit, or facing rejections when applying for loans. Bottom line — it means fewer options when you need them most or being beholden to co-signers or just having less than you want. And it can be stressful and worrisome because you’re always one emergency away from a financial crisis you can’t easily solve on your own.

And the problem compounds. Bad credit means you may need to keep more cash flow on hand, because if you can’t leverage credit during a true emergency, you’re relying on cash alone. Ideally, your emergency fund is your first line of defense, and credit is simply the backup parachute you hope you never need. But without that secondary safety net, one major expense that exceeds your savings can push you into a desperate situation. And that reality forces you to hold far more money in cash or in lower interest-bearing accounts — money that could have been invested and growing for your future. Yes, this affects your wealth-building journey! Your credit score literally determines your choices and how you need to allocate your money.

What Really Impacts Your Credit Score

So you see how important this is, and it’s equally important to know what affects your credit score so you’re moving with intention. Remember those five factors we talked about earlier? Let’s break down what they really mean and why they matter.

Payment History (35%) — The Non-Negotiable

This is the biggest factor by far. Do you pay your credit accounts on time? That’s what lenders care about most. And late payments are more common than people realize. A 2025 LendingTree survey found that 48% of Americans paid at least one bill late in the past year — and while not every late bill hits your credit, late payments on credit cards, loans, and other reported accounts can drop your score fast.

If an unpaid bill gets sent to collections, that can show up on your credit report too, even if the original bill wasn’t a credit account. And because late payments stay on your report for seven years, one slip can follow you for a long time.

Credit Utilization (30%) — The One Most People Mess Up

This is how much of your available credit you’re actually using. If you have a $10,000 credit limit and you’re carrying a $3,000 balance, you’re at 30% utilization. Lenders want to see you keeping this number low — ideally under 10%, but definitely under 30%. Why? Because high utilization signals that you might be overextended or relying too heavily on credit. Even if you pay your balance in full every month, if your balance is high when your statement closes, it can hurt your score.

Length of Credit History (15%) — Time Always Matters

How long have you had credit accounts open? Lenders like to see a longer history because it gives them more data about how you manage credit over time. This is why closing old credit cards can actually hurt your score — you’re shortening your credit history. Keep those old accounts open, even if you’re not using them regularly.

New Credit (10%) — Don’t Go Application-Crazy

Opening too many new accounts in a short period makes you look risky to lenders. Every time you apply for credit, it triggers a “hard inquiry” on your report, which can ding your score slightly. A few inquiries won’t kill you, but if you’re applying for five credit cards in one month, that’s a red flag.

Credit Mix (10%) — Variety Helps (But Don’t Stress It)

Do you have different types of credit — credit cards, car loans, student loans, a mortgage? Having a mix shows you can handle different kinds of credit responsibly. But this is the least important factor, so don’t go opening accounts you don’t need just to diversify.

How to Protect Your Score — The Practical Stuff

Now that you know what affects your credit score, let’s talk about ways to actually protect it. These aren’t complicated strategies — they’re simple habits that keep your score strong. Things to consider:

Automate Your Payments

Set up automatic payments for at least the minimum due on every credit account. This removes human error from the equation. You can still pay extra manually — and most of the time, you should — but automation ensures you never miss a due date. Most banks and credit card companies make this easy to set up online.

The Money Dearest approach is to keep credit simple: automate required payments like mortgages, car loans, student loans, and even your credit card minimums so nothing ever reports late. Then use your credit cards strategically for cash back or travel points, and pay them off in full each month to avoid interest and protect your cash flow.

And as always, avoid unnecessary lines of credit like department store cards, buy-now-pay-later services, furniture or electronics financing, and finance company loans, which often come with higher interest rates and encourage overspending.

Keep Your Credit Utilization Low

Remember that 30% rule? Conventional wisdom says to keep your balances well below that threshold — under 10% is even better. If you have a $5,000 credit limit, try to keep your balance under $500. But the Money Dearest approach is simple: pay your balance off in full each month if you’re using credit cards for benefits like cash back, travel rewards, or building credit. Reserve using credit and carrying a balance month to month for large purchases like a home or car where financing actually makes sense. Don’t let credit card balances become your normal.

Don’t Close Old Credit Cards

Even if you’re not using a card anymore, keep it open with a zero balance. Closing accounts shortens your credit history and reduces your available credit, which can hurt your utilization ratio. If you’re worried about annual fees, call and ask to downgrade to a no-fee version of the card instead of closing it.

Monitor Your Credit Regularly

You’re entitled to a free credit report from each of the three bureaus once a year at AnnualCreditReport.com. Spread them out — check one every four months so you’re monitoring your credit three times a year for free. You can also use free services like Credit Karma or your bank’s credit monitoring tools to keep an eye on your score between official reports.

Freeze Your Credit When You’re Not Using It

A credit freeze prevents anyone (including you) from opening new accounts in your name. It’s one of the best protections against identity theft. You can freeze and unfreeze your credit for free with all three bureaus online. Freeze it when you’re not actively applying for credit, then unfreeze it temporarily when you need to. It takes just a few minutes and gives you serious peace of mind. Note: A credit freeze prevents new creditors from viewing your file but doesn’t affect your existing accounts or scores.

Dispute Errors Immediately

If you find something wrong on your credit report — a payment marked late that you paid on time, an account that isn’t yours, incorrect balances — dispute it right away. You can file disputes directly with the credit bureaus online. They have 30 days to investigate and correct any errors.

Remember: Perfection Is Not Required

Among Americans who have a FICO score, only about one in four reach an exceptional 800+. Millions of people don’t have a score at all because they’re credit invisible or don’t have enough history to be scored. You don’t need to be perfect — just consistent. A good score (670+) opens most doors. Pay on time, keep your credit card balances low — ideally at zero by paying in full each month — and monitor your reports. Do those three things and you’re in good shape.

Your Credit Score Is Absolutely Worth Protecting

So now you know. And when you know better, you do better. Because protecting your credit score is about protecting your options, your reputation, and your ability to level up in life and take advantage of every opportunity that comes your way. You don’t want to miss out on qualifying for a new home because five department store credit cards are past due. It’s about qualifying for what you want at the best rates instead of paying a premium for everything. It’s about financial independence.

So if you haven’t checked your credit lately, today is the day. Go to AnnualCreditReport.com and pull your free report. Look through it, make sure it’s accurate, and take care of anything that needs to be fixed.  Get in position for your best life.

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Related Money Dearest Pillars

→ Cash Flow

→ Debt Management

→ Money Mindset

→ Saving & Investing

Sources:

Consumer Financial Protection Bureau. (2023). “What You Need to Know About the Equal Credit Opportunity Act.” ConsumerFinance.gov

Experian. (2024). “What Is the Average Credit Score in the U.S.” Experian.com

FICO. (2024). “Average U.S. FICO Score Stays at 717.” FICO.com

The Motley Fool. (2025). “The Average Credit Score in America.” Fool.com

Disclaimer: This content is educational and provided for general information only. It is not financial advice. Always consult a licensed financial professional for advice specific to your situation.