Credit Scores 101
As you get older, nearly every big purchase in your life will be made with reference to your credit score. According to a 2025 report written by Ramsey Solutions, 87% of U.S. adults said high school didn’t leave them “fully prepared” for how to handle money in the real world. At Gulf Winds, you don’t have to take on your financial journey alone. Our team is here to support you in the day-to-day and our Certified Financial Coaches are here to help you build smart credit habits so you can unlock better financial wellbeing.
Understanding Credit
In an article published by the FTC, credit is simply defined as your credit history. This means the number of credit cards and loans you have, and if you pay your bills on time or are late on payments. Financing when buying a new car, renting or buying a home, and other costly decisions can depend on what your credit looks like.
Typically, credit is defined as “good” or “bad,” but “bad” credit does not always reflect something you have done wrong. You might have “bad” credit if you have few or no bills paid, you paid your bills late, or you couldn’t afford a loan you’ve previously borrowed. Your credit report will give you an idea of what your credit is looking like. Annually, every individual is given a free yearly report to keep track of what terms your credit is in. Through AnnualCreditReport.com, you can check your report once a week for free online, to see what lenders will receive when they check your credit before offering you a loan. This is also a good place to watch your credit for any mistakes or fraud.
For more information on how to freeze or monitor your credit and fix mistakes, the FTC has outlined steps in an article, here.
Debunking Credit Myths
Here are a couple of credit myths debunked in a report by Experian.
Myth: Debt is inherently bad.
Often, people may shy away from making financial decisions with credit because they are scared after hearing bad stories. Most people share that debt should be avoided based on past experience, but this isn’t entirely true.
Responsible borrowing can improve your financial situation. Borrowing from lenders for big items like a house, college tuition, or a car, can increase your credit score value over time.
Myth: Checking your credit score could lower it.
Experian shares that checking your own credit score will have no impact on your credit. In fact, it can actually be helpful when trying to improve your credit score.
Myth: Higher income means higher credit scores.
Income actually makes no impact on your credit score. According to Experian, the key role in improving your credit score is learning how to responsibly manage your debt. People with a variety of incomes who all have good financial management skills tend to have a good credit score. It is important to learn how to efficiently make on-time payments, avoid high credit card balances, and show you and handle multiple credit, or loan, accounts.
Because your credit score can impact so many purchases, it can feel like the score reflects your financial reputation. At Gulf Winds, you are more than your credit score. We understand that your credit score is not permanent, and our Certified Financial Coaches can help you look at your credit history, and make the improvements needed to keep you moving forward. Make an appointment today to begin your journey to financial confidence.