March is National Credit Education Month, yeah it’s a real thing.

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And, according to, Black people have the lowest average credit score—677 compared to 701 for Hispanics, 735 for Whites and 745 for Asians. Systemic racism plays a huge factor in that number. Black people earn less, have lower home values and are less likely to receive an inheritance. All of those variables increase our collective financial vulnerability, making it more challenging to amass the cash reserves necessary to counter heavy debt loads or limiting access to utilizing it effectively. But there’s another challenge. Many people don’t understand how to effectively use their credit.

More money, new problems is also a thing in the Black community. As more folks earn degrees, start businesses and elevate professionally the challenges of being a first in your lane is an additional financial burden. Many parents and elders don't have the ability to give the next generation a cash heavy starter pack—they don't own homes with a lot of equity (redlining) or have access to a variety of assets or credit due to income.

That’s why discussing how credit works is important. Here are few key facts that can frame a discussion, and action.

  1. 5 Key Factors Impact Your Credit Score.

Your credit score is comprised of five variables—payment history, credit utilization, credit history, new credit inquiries, diversification—that shape your profile. Getting to that 700+ score will require diligent bill payment, maintaining low balance ratios on all of your credit cards and limiting how often you apply for new lines of credit.

2. Credit Matters Most When You Need It.

It sounds simple because it is. You should always be financially responsible, but you should utilize strategy when you want to do things such as finance a new home or car, or line of credit for a venture. Plan ahead. Make sure to give yourself time to lower debt load, sure up timely payments and dispute any incorrect information.

3. Check Your Score, Regularly.

Ordering and reviewing your credit report annually is so 90's. Nowadays, almost every credit card offers a credit score tracker and you should subscribe to it. First, it helps you get an understanding in real time how your financial choices impact your score—late payments, too many accounts, etc. Second, it allows you to monitor your accounts for fraudulent charges, which can damage your score.

4. Don’t Be Afraid to Use Your Credit to Help You Get Ahead.

Starting, shifting or growing a business? When used properly credit can be your biggest ally. Speak with a financial expert to learn more about how you can strategically leverage your credit to support your goals.