As we know, communities of color lag behind white communities when it comes to building wealth. If we want to leave a lasting legacy for our families, we must get our money right. April is Financial Literacy Month. In our blog this month, Corporate Counsel Men of Color will be focusing on building our credit, generating income and improving our personal finances.  Let’s get started!


Did you know?

  • Credit bureaus, such as Experian, Equifax, and TransUnion, are private companies, not government agencies.
  • The credit score model was invented in the 1950s by a mathematician named Bill Fair and an engineer named Earl Isaac, hence the name FICO (Fair Isaac Corporation).
  • Not all lenders report to all three major credit bureaus, which is why it’s important to review credit reports from all three.
  • Credit bureaus do not make lending decisions. They simply provide information to lenders and other authorized parties.
  • You can request a free credit report from each of the three major credit bureaus once a year through
  • Payment history is the most important factor that determines your credit score, accounting for 35% of your FICO score.
  • Closing a credit card account may actually harm your credit score, especially if it’s a card you’ve had for a long time.
  • Credit inquiries, such as when you apply for a loan or credit card, can temporarily lower your credit scores.
  • Your credit report contains information about your credit history for the past 7-10 years, depending on the type of information.
  • You can dispute errors or inaccuracies on your credit report by contacting the credit bureau in writing and providing documentation to support your claim.


Most people have heard of credit scores, but few really understand how they work. A credit score is an important financial metric that can impact your ability to borrow money, secure a job or rental agreement, and even get a cell phone contract.

With that in mind, it’s essential that you understand the basics of credit scores and how to improve them. This guide will take you through the key points you need to know to get started on the path to financial success.

Credit Basics: What You Must Know to Improve Your Profile and Score

Basically, a credit score is a number that helps lenders determine how much of a risk you are when it comes to borrowing money. The higher your score, the more likely you are to be approved for loans, credit cards and other financial products.

Your score is calculated based on a number of factors, including your payment history, the amount of debt you owe, and the length of your credit history. Understanding the basics of credit scores is important if you want to improve your financial health and make better decisions when it comes to borrowing money.

FICO Credit Score Ranges

  • Exceptional: 800 and above
  • Very Good: 740-799
  • Good: 670-739
  • Fair: 580-669
  • Poor: 579 and below

FICO Percentages

  • Payment history: 35%
  • Credit utilization: 30%
  • Length of credit history: 15%
  • Credit mix: 10%
  • New credit: 10%

Key Points About the 5 Factors That Affect Your Credit Score

There are five factors that can impact your credit score, and it’s important to understand how each one works. Here are some key points to keep in mind:

  • Payment history: This is the biggest factor affecting your credit score, accounting for 35% of the total. Making payments on time is crucial, so be sure to stay current on all of your bills.
  • Credit utilization: This accounts for 30% of your score and refers to how much of your available credit you’re using. To maintain a good score, it’s generally recommended to keep your credit utilization below 30%.
  • Length of credit history: The longer your credit history, the better. This factor accounts for 15% of your score.
  • Credit mix: Having a mix of different types of credit (such as credit cards, loans and a mortgage) can be beneficial and accounts for 10% of your score.
  • New credit: Opening several new credit accounts in a short period of time can lower your score, so it’s best to avoid doing so unless necessary. This factor accounts for 10% of your score.

Types of Credit Scores

There are several types of credit scores used by lenders and financial institutions to assess creditworthiness. Some of the most common types of credit scores include:

FICO Score: The FICO score is one of the most widely used credit scores in the US and is based on credit history data from the three major credit bureaus – Experian, Equifax, and TransUnion.

VantageScore: The VantageScore was developed by the three major credit bureaus as a competitor to the FICO score. It also uses credit history data from the three major credit bureaus but places more emphasis on payment history and credit utilization. Credit Karma is a popular site that provides scores using the VantageScore 3.0 model.

TransRisk Score: The TransRisk score is a credit score developed by TransUnion, one of the major credit bureaus. It is based on credit history data from TransUnion and places more emphasis on recent credit behavior.

Equifax Credit Score: The Equifax credit score is a credit score developed by Equifax, one of the major credit bureaus. It is based on credit history data from Equifax and places more emphasis on payment history.

Experian Credit Score: The Experian credit score is a credit score developed by Experian, one of the major credit bureaus. It is based on credit history data from Experian and places more emphasis on credit utilization.

Understanding the different types of credit scores and how they are calculated can help you make more informed decisions about your credit and improve your creditworthiness over time.

Tips to Help You Boost Your Credit Scores

Increasing your credit scores takes time and effort, but it’s worth it in the long run. Here are some tips to help improve your credit scores:

  • Start paying your bills on time: Even if you’ve made late payments in the past, you can always create new habits when it comes to paying your bills. From now on, make every effort to submit your payments before or on the due date.
  • Keep credit card balances low: High credit card balances can negatively impact your credit scores, even if you make payments on time. Aim to keep your credit card balances below 30% of your credit limit. If keeping your balances low is challenging, find ways to boost your income. That way, you won’t have to rely on your credit cards to maintain your standard of living.
  • Don’t close unused credit cards: Closing unused credit cards can actually hurt your credit scores. Keeping these accounts open and using them responsibly can help improve your credit utilization ratio and demonstrate a longer credit history.
  • Monitor your credit reports: Check your credit reports regularly for errors or inaccuracies. If you find any errors, dispute them with the credit bureaus to have them corrected.
  • Be strategic about new credit applications: Applying for new credit can lead to hard inquiries on your credit report, which can temporarily lower your credit scores. Try to limit new credit applications and only apply for credit when necessary.

Remember, improving your credit score is a journey that requires patience, discipline and a commitment to responsible financial habits. With dedication and effort, you can take control of your credit and your financial future.

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