Photo courtesy of Glamour
Career 30 August 2017
When it comes to your finances, understanding credit and how it works can be one of the most confusing and frustrating aspects. Myths and misconceptions about credit scores run rampant, so it can be difficult to know what’s what. Even if you have the best intentions, it can end up being costly to make a mistake as a result of not understanding how credit works. Here are 6 of the most common credit myths, debunked.
1: Closing a lot of credit cards will improve my credit score.
Your credit score takes the average length of your credit accounts into consideration, so closing a credit card you’ve had for a long time can actually have a negative impact on your score. Your score is also determined based on the amount of available credit you have, so closing a credit card with a high credit limit can decrease your debt-to-available-credit ratio. Try to avoid closing too many credit cards at once and consider just putting some of your credit cards aside so you can leave them open without actually using them.
Photo courtesy of Digital Brainiac
2: I don’t have any credit cards or debt, so I must have a good credit score.
A lack of credit or debt can actually make you appear unfavorable in the eyes of a lender. Lenders gauge your creditworthiness based on your history of responsible credit use.
A limited history of credit (and on-time payments) can actually result in a lower score and a lender seeing you as a risky borrower. However, there are steps you can take to build your credit from scratch.
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3: Checking my credit report will lower my credit score.
Checking your own credit report is considered a “soft inquiry” and will have no effect on raising or lowering your credit score. You can check your credit report annually for free with each of the 3 bureaus (Transunion, Experian, and Equifax).
4: I always pay my bills on time – therefore I must have a high credit score.
While payment history does make up a significant portion of your credit score, other factors are taken into consideration as well. Your credit score is also determined by your length of credit history, amount owed, types of credit, and number of credit inquiries.
5: I make a lot of money, so I must have a good credit score.
Your income or the amount of money you have saved in the bank has no bearing on your credit score, other than the fact that this may enable you to make your minimum monthly payments. Other information that is not included on your credit report is your ethnicity, criminal record, political affiliation, religion, medical history, and gender.
6: With a bad credit score, I can never get a loan.
This is not necessarily true. While it will certainly be more difficult, there are companies willing to lend to people with lower scores. However, you will likely have a higher interest rate than someone with good credit. An alternative is to have someone cosign a loan for you, though this option should be approached with caution.
When it comes to your finances, knowledge is power. Educating yourself on how to build the perfect credit history will turn you into a prime candidate for things like a mortgage or personal loan. Now that you know some of the most common myths about credit, get to work on boosting your score!
6 Min Read
I live the pain and stress of being black in America every day: I am a black woman, the mother of a black son, sister to black men, and aunt to my black nephews. I remember what it was like as a young girl to be afraid to go to Howard Beach for fear of being chased out. I know what it's like to walk on Liberty Avenue and be called "nigger" and being so young that I didn't understand what the word meant, I had to ask my mother. I know too well that feeling in the pit of your stomach when a police car pulls up behind you and even though you know you haven't done anything wrong you fear that your life may be in danger from what should be a simple encounter. Like all African Americans, I am tired of this burden.
African Americans have a long history of having to fight for our humanity in America. We have had to fight for freedom, we have had to fight for equality, and we have had to fight for our lives. The fight continues to go on. I have often quoted that line from the character Sophia in Alice Walker's The Color Purple, "All my life I had to fight." When I say this to my white counterparts it can sometimes be uncomfortable because it's clear that they just don't get it. They view it as melodramatic. But it's not. It's part of the black experience, and it is the part of the black experience that black people don't want.
I have often quoted that line from the character Sophia in Alice Walker's The Color Purple, "All my life I had to fight."
While I was out yesterday, passing out PPE and talking to people, a woman asked me, "What is it going to take for this to change?" I told her that I think peaceful protesting is a good start. But it's just the start. We can't elect the same people for the past 20-30 years, some in the same positions, and then talk about how nothing has changed in the past 30 years.
This injustice, inequality, and inequity will not spontaneously disappear. It will take bold, outspoken, and fearless leadership to eradicate the systemic racism in our country. We must address the violence at the hands of a police force paid to serve and protect us. We must address the recurring experience of black people being passed over for a promotion and then being asked to train the white person who was hired. We must address the inequities in contract opportunities available to black businesses who are repeatedly deemed to lack the capacity. We must address the disparity in the quality of education provided to black students. We must address the right to a living wage, health care, and sick pay.
While we like to regard the system as broken, I've come to believe the system is working exactly as it was meant to for the people who are benefiting from it. We need a new system. One that works for all of us. I am running to become the mayor of New York City because I can't assume there's another person who has the courage to do the work that needs to be done to create a fair and just city.
We can't elect the same people for the past 20-30 years, some in the same positions, and then talk about how nothing has changed in the past 30 years.
There are some things we may not be able to change in people, but at this moment I think that whether you are black, white, purple, or yellow we all should be looking internally to see what is one thing that you can do to change this dynamic. Here's where we can start:
If we want change, we need a total reform of police departments throughout this country. That is going to require taking a hard look at our requirements to become a police officer, our disciplinary procedures when civilian complaints are filed, and a review of what and how we police. No one deserves to lose their life based upon the accusation of carrying counterfeit cash. We also need to hold police officers accountable for their actions. While it is their duty to protect and serve they should not be above the law. Even at this very moment, police officers are overstepping their boundaries.
If we want change, we have to build a sense of camaraderie between the police and community. A sense of working together and creating positive experiences. We have to be honest about the fact that we haven't allowed that to happen because we have utilized our police department as a revenue-generating entity. We are more concerned with cops writing tickets than protecting and serving. Even during these moments of protest we are witness to the differences made when the police supported the protesters and stood hand in hand with them or took a knee. It resulted in less violence and more peaceful protest. People felt heard; people felt respected; people felt like they mattered.
While we like to regard the system as broken, I've come to believe the system is working exactly as it was meant to for the people who are benefiting from it. We need a new system.
If we want change, we have to be willing to clean house. And that means that some of you are going to have to step up to the plate and take roles of leadership. In my city alone, there are 35 city council seats that are term-limited in 2021. There are some that aren't termed but maybe their term should be up. Step up to the plate and run. If nothing else it will let our elected officials see that they need to stop being comfortable and do more. We don't need you out in the street taking selfies or reporting the problems to us. We need solutions. We need you in a room implementing policies that will ensure that these things don't continue to happen.
If we want change, we need to support grassroots candidates that are not in corporate pockets, who are not taking PAC money, and who really want to make a difference to their community. We need candidates that know first-hand and can relate to the experiences that many of us are going through.
We are at a pivotal moment. It is inspiring to see people from all races and backgrounds in the streets protesting, standing up for justice, and wanting to see change. We must seize this moment, but we must also be mindful that change requires more.
People often ask me why I decided to run for office? I am running for me. I am running for the little girl that was called nigger on Liberty Avenue. For the woman who has been pulled over for no reason. For my nephew who was consistently stopped during the era of stop and frisk. I am running for your son, your brother, and your nephew. I am running so that the next generation will never have to say, "All my life I had to fight." Because although we won't stop until we see justice and changes that address inequality and inequity effectively, this fight is exhausting.