Understanding Your Credit and How to Improve It
Do you ever wonder what the value of the numbers on your credit report really means? Does simply thinking about your credit score give you anxiety? If so—you are not alone. According to Experian and other financial sources like Rocket Money, the average FICO Score in the United States in 2023 was 715 and that number is smaller by younger age groups and higher by older age groups.
In my experience working with single mothers facing financial burdens, I often encounter scores in the 580–640 range and sometimes lower—but it’s important to note that the major credit bureaus do not publish reliable data broken down by marital status or parental status and this is based on my own experience with those I coach.
Credit scores play an important role because they help lenders gauge how responsibly you manage credit. But let’s be clear—your credit score is not a reflection of your worth as a person.
If you’re here, it’s likely because you’ve experienced some of the financial challenges that often come with single motherhood. Life can throw unexpected obstacles your way—medical bills, job changes, childcare costs—and those moments can easily impact your credit score. But the good news is, your score can change just like your circumstances can.
Let’s dive a little deeper so you can learn how to obtain, understand, and manage your credit.
What Is a Credit Score?
A credit score is a three-digit number ranging from 300 to 850, with 300 being the lowest and 850 the highest. It represents your creditworthiness—essentially, how likely you are to repay borrowed money responsibly.
Credit scores were created by the Fair Isaac Corporation (FICO). It’s the most widely used credit scoring model by lenders to evaluate how likely you are to repay borrowed money on time. VantageScore is another type of credit score, developed by the three major credit bureaus: Experian, Equifax, and TransUnion, as an alternative to the FICO Score.
Credit scores are ranked from Poor to Excellent with approximate ranges as follows:
· 300–579: Poor
· 580–669: Fair
· 670–739: Good
· 740–799: Very Good
· 800–850: Excellent
What Makes Up Your Credit Scores?
It is important to understand the makeup of your credit scores so you can manage it efficiently. Your credit scores are made up of five main factors that include the following:
· Payment History (35%) – On-time payments matter most.
· Credit Utilization (30%) – Keep credit card balances below 30% of your limit.
· Length of Credit History (15%) – The longer you’ve had credit, the better.
· Credit Mix (10%) – A healthy mix of credit types (credit card, auto loan, etc.) helps.
· New Credit Inquiries (10%) – Too many new applications in a short time can hurt your score.
What Is a Credit Report?
A credit report is a detailed record of your financial history that shows how you’ve managed credit. It includes your accounts, payment history, balances, and any past-due debts or collections and includes your credit scores.
Think of it as your financial report card—lenders use it to decide whether to approve you for credit, housing, or loans.
Where is Credit Reported?
Credit scores are tracked in your credit report by the three major credit bureaus:
Each of the three main credit bureaus above keeps its own version of your report, and details may vary slightly between them.
You can access all three of your credit reports for free once every 12 months at the official site https://www.annualcreditreport.com.
If you’d like to monitor your credit regularly, it’s best to create individual accounts with each bureau so you can check your scores, track updates, and dispute any errors anytime.
What Are Some Practical Ways to Improve Your Credit Score?
Paying off debt can feel overwhelming, but it’s not the only factor that affects your credit score. Several other habits can make a big difference when practiced consistently:
Pay your bills on time, every time.
Payment history makes up 35% of your FICO Score, so even one missed payment can significantly lower it. Set reminders, use autopay, or schedule payments early.
The three major credit bureaus, Experian, Equifax, and TransUnion, record payments that are 30, 60, and 90 days late, as well as accounts sent to collections, all of which can negatively impact your score.Lower your credit utilization ratio.
Aim to use less than 30% of your available credit. Example: If your card limit is $1,000, try to keep your balance below $300. Lower utilization shows lenders you manage credit responsibly.Keep old accounts open when possible.
Older accounts help strengthen your credit history length, which makes up about 15% of your FICO Score. Unless an account has high fees or security concerns, keeping it open can help your score.Limit new credit applications.
Every time a lender performs a “hard inquiry,” your score may drop a few points. Too many applications in a short period can suggest financial stress. You can check your own credit report (a “soft inquiry”) anytime at AnnualCreditReport.com without affecting your score. When applying for loans, ask lenders for a prequalification first, which uses a soft inquiry rather than a hard one.Dispute errors on your credit report.
Review your reports regularly for mistakes such as outdated accounts, incorrect balances, or debts that are over 7 years old (which should usually fall off your report). If you find errors, file a dispute directly with the credit bureau, each one has an online dispute process. Removing inaccurate negative marks can raise your score within weeks.Become an authorized user on a trusted person’s account.
If someone with good credit adds you as an authorized user, their positive payment history can help strengthen your own score. Make sure they keep low balances and pay on time, since their actions will reflect on your report.
What Are Some Myths About Credit Scores?
There are many myths surrounding credit scores and believing them can hold you back from making smart financial decisions. Always verify information with credible sources such as the credit bureaus themselves, Experian, Equifax, and TransUnion.
Here are some of the most common misconceptions:
1. “Checking my credit score will hurt it.”- This is false. Checking your own credit report or score is considered a soft inquiry, which has no impact on your credit score. You can access all three of your credit reports for free once per year at https://www.annualcreditreport.com (and currently even more often). Only hard inquiries when a lender checks your credit for a loan or credit card application can temporarily lower your score by a few points.
2. “I need to carry a balance to build credit.”- This is also false. You do not need to carry a balance from month to month to improve your credit. In fact, paying your revolving accounts (like credit cards) in full each month is better for your credit score and saves you from paying interest and late fees. Lenders want to see that you use credit responsibly, not that you’re in debt.
3. “Once my credit is bad, it’s permanent.”- Not true. Credit is always repairable with time, consistency, and good financial habits. Late payments and other negative marks usually fall off your report after seven years, and every on-time payment you make helps rebuild your score. With discipline, planning, and smart debt management, your credit can steadily improve—no matter where you’re starting from.
Rebuilding Takes Time - But God Restores All Things
You did not get in financial difficulties overnight; therefore, you need to be patient with yourself to get your credit back to a “worthy” status. We all make mistakes, but you do not have to be punished for your mistakes all your life. Our Lord and Savior will not make this permanent. “Let us start rebuilding… The God of heaven will give us success.” Nehemiah 2:17–18 (NIV). Start by understanding where you are, this is your baseline, and every transformation requires a starting point. The goal is not to live in shame and deprivation, the goal is to rebuild, transform and forge ahead in life. “The plans of the diligent lead to profit as surely as haste leads to poverty.” Proverbs 21:5 (NIV).
Rebuilding Your Credit—and Your Confidence—One Step at a Time
Your credit score is more than just a number; it’s a reflection of your financial story up to this point—not your worth or your destiny. Understanding how credit works empowers you to take control of your future instead of letting past mistakes define you.
When you apply the principles discussed here, paying bills on time, managing debt wisely, keeping your balances low, and reviewing your reports regularly, you begin to rebuild not only your credit but also your confidence. Remember, progress happens little by little, through consistency and intention.
Financial transformation, like spiritual growth, takes patience. You didn’t arrive at this point overnight, and you won’t rebuild overnight either, but every step forward is proof that you’re rewriting your story. “Let us start rebuilding… The God of heaven will give us success.” Nehemiah 2:17–18 (NIV)
Trust that as you walk in diligence, faith, and perseverance, God is working behind the scenes to restore what was lost. Your mistakes are not permanent, they’re lessons that prepare you for greater stewardship, freedom, and abundance. “The plans of the diligent lead to profit as surely as haste leads to poverty.” Proverbs 21:5 (NIV)
Stay focused on progress, not perfection. With faith, planning, and consistency, you can—and will—build a life of financial peace and Abundance.
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