Empowering You with Knowledge, Tools, and Strategies for Financial Confidence.

What Is A Credit Score and Who Uses It?

A credit score is a numerical representation of your creditworthiness (income to debt ratio), which is based on your credit history and current credit behavior, typically ranging from 300 to 850. Lenders use it to assess the risk of lending you money, with higher scores indicating lower risk and better chances of securing loans or credit at favorable terms.

Personal Credit vs Business Credit

Personal credit and business credit are connected, but how much they affect each other depends on your business structure and how you use credit. Here’s the clearest way to think about it.

How Personal Credit Affects Business Credit

Personal credit can influence business credit in several situations:

- If you’re a sole proprietor or single‑member LLC
- Your personal credit and business credit are essentially tied together.
- Lenders often treat you and the business as the same entity.
 

Your personal credit score will heavily influence:

- Loan approvals
- Credit limits
- Interest rates

Getting Started

Check Your Credit Report

Checking your credit report will always be the first step in your financial wellness journey. It’s the most important step because it allows you to assess whether your credit mix—such as a balance of credit cards, installment loans, and mortgages—is diverse enough to positively impact your score. Regularly reviewing your report ensures you're effectively managing all aspects of your credit, helping you stay on track for better financial health and improved creditworthiness. To make the process easier, try using a highlighter to mark any debts that need attention, and write down your debts from lowest to highest expense to create a clear repayment strategy.

Know Your Federal Law Rights

Federal law allows you to get a free copy of your credit report every 12 months from each of the three major credit reporting companies—Equifax, Experian, and TransUnion—through AnnualCreditReport.com. Free weekly online credit reports are also available from these companies, so take advantage of this service and ensure the information on all of your reports is correct and up to date.
Get Your Free Credit Report

You’ve had the chance to request a free copy of your credit report, reviewed it, and feel confident that you may qualify for funding from a lender. Now, let’s look at some common scenarios that highlight why having solid credit is so important when working toward your financial goals.

🏠 Renting an Apartment

A good score could help you secure that dream rental without a hefty deposit.

Depending on the state you live in, leasing agencies may request to pull your credit in order to review your debt‑to‑income ratio. This is a common practice used to ensure that both you and the rental property are a good financial fit for each other.

Make sure to pay attention to any recent credit inquiries—such as those from credit card companies, auto lenders, or other financial institutions—as multiple credit pulls in a short period of time can cause your credit score to drop.

🏡 Home Mortgage

Looking to buy a home? The process shares some similarities with renting an apartment, but it also comes with additional considerations—such as interest rates.

A strong credit score can help you secure a more favorable mortgage rate, allowing you to pay off your home loan more efficiently. Buying a home also involves different requirements than renting, including the need to carry homeowners insurance that meets your state’s minimum coverage limits.

If you’re a first‑time homebuyer, you may also qualify for certain tax credits or incentives. Contact us for more information about available first‑time homebuyer programs.

Here are interest rates based on credit scores
(Source: myFICO (August 2022)

Have questions? Send a message.
Alright, now that we've discussed the importance of good credit to obtain safe and comfortable shelter, let's move on to transportation.

🚗 Auto Loans

A higher score means lower interest rates on your auto loan—saving you money in the long run!

When you visit a dealership, you’ll be asked a series of questions and required to provide documentation such as proof of identification, employment, references, and current insurance. If you have the option to get pre‑qualified through your credit union or bank, it can save you significant time and money compared to having the dealership run your credit through multiple lenders.

Walk in prepared. Bring your pre‑qualification letter along with all the required documents mentioned above to help streamline the process and put yourself in a stronger negotiating position.

🚗 Auto Insurance

Car insurance is required in every state, though the type of coverage and minimum limits vary depending on where you live. Many insurance companies may also offer better rates if you maintain a strong credit score and a solid driving record.

As mentioned in the Auto Loans section, proof of insurance is required when purchasing a vehicle. One of the best ways to find reasonable rates is to visit insurance providers’ websites directly and request a quote. It’s usually best to avoid third‑party sites that promise to compare rates for you, as they often lead to excessive emails, texts, and calls.

You may also want to check with your bank, credit union, or employer for additional options, as they sometimes offer discounted auto insurance premiums.

Since we’ve already covered shelter and transportation, let’s take a moment to understand what steps you can take if you’re denied funding.

Review & Dispute Credit Report Errors  

Reviewing and disputing any errors on your credit report for each of the credit reporting companies—Equifax, Experian, and TransUnion—is important because inaccuracies can negatively affect your credit score, leading to higher interest rates or even loan denials. Addressing these errors ensures that your credit report is accurate, up-to-date, and truly reflects your financial behavior, helping you maintain or improve your creditworthiness.

 Here Are Three Ways to Dispute Credit Report Errors:

01

Online

Visit the website of each credit reporting company (Equifax, Experian, or TransUnion) and use their online dispute tool to file a claim. This is the quickest and easiest method, and they typically respond within 30 days. (You can use the links below to fill out TransUnion and Experian's online dispute form).
02

Phone

Contact the credit bureau’s customer service directly to dispute an item on your report. This method may be less reliable than filing online, but it’s an option if you prefer speaking with someone.
03

Mail

Write a formal letter to the credit reporting company, detailing the error, and include supporting documentation (such as bank statements, receipts, or letters from creditors). Be sure to send the letter via certified mail to have proof of your dispute.

Resources You Can Use to Dispute Errors

01

TransUnion

Transunion’s dispute process by mail and dispute form
 

Mail the form with your letter to:

TransUnion Customer Solutions
P.O. Box 2000
Chester, PA 19016

02

Equifax

Equifax’s dispute process
 

Mail your letter to:

Equifax Information Services LLC
P.O. Box 740256
Atlanta, GA 30374

03

Experian

Experian’s dispute process
and dispute form
 

Mail the form with your letter to:

Experian
P.O. Box 4500
Allen, TX 75013

If the credit bureaus fail to correct inaccurate information after you’ve submitted your dispute(s), you can file a complaint with the Consumer Financial Protection Bureau (CFPB).
File CFPB Complaint

Did You Know?

Correcting a misspelled name or removing an outdated or incorrect address on your credit report may not directly boost your credit score, but it can help ensure your credit report is accurate and up-to-date. While these corrections don’t impact your credit score on their own, resolving discrepancies or errors can prevent potential issues, like identity confusion or fraud, which could indirectly protect or improve your credit standing over time.
Sign Up For Free and Download The Dispute Sample Letter Today

Should I Consolidate My Debt?

Consolidating debt, such as student loans and credit card payments, can simplify your finances, potentially lower your interest rates, and help improve your credit score by reducing your overall debt-to-income ratio.

7 Consolidation
Mistakes To Avoid

#1 Avoiding Consolidation Scams – Be cautious of companies that claim to help you settle your debt for less. Always go directly to the source when considering consolidation for example, apply for a credit card with a hight limit that offers a balance transfer, allowing you to consolidate your credit cards without third-party fees or services. Additionally, always ask your creditors for a payment plan or hardship program, as they may offer more manageable terms directly.
 
#2 Not Working on Your Credit First – Failing to improve your credit score before consolidating may result in higher rates. 
#3 Not Considering All Your Options – Overlooking other debt repayment strategies can limit your potential savings and flexibility.
 
#4 Going Deeper Into Debt – Consolidating without a plan can lead to continued borrowing, worsening your financial situation.
 
#5 Taking on a Higher Interest Rate – Consolidating with a higher interest rate than existing debts can increase your financial burden.
 
#6 Taking the Longest Term Available – Opting for the longest repayment term can lower monthly payments, but may end up costing more in the long run.

#7 Not Addressing the Root Cause of Your Debt – Failing to address why you accumulated debt in the first place can result in falling back into the same financial patterns.