

Get The Tea On The Good, The Bad, And The Ugly Of Your Credit Score
Didn't know April is Financial Literacy Month? Well, now you do. And what better excuse to get your finances in check or figure out how you'll add to your already lit bank accounts? Let's get into some knowledge about credit. It's an issue we all face as we look for ways to reach financial freedom and the best road to where the money resides. Sadly, the stats reflect harsh realities for many of us. Fifty-four percent of Black adults report having no credit or a poor to fair credit score (below 640).
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Carmen Perez, Varo Bank's personal finance advocate and creator of MakeRealCents.com, a financial fitness platform, shares the good, bad and ugly on credit. Perez, an award-winning professional who's worked for Citi and Morgan Stanley, successfully paid off $57,000 of her own debt in less than three years.
"My finances were a hot mess up until I was able to commit to a plan," she shares. After facing a lawsuit from a private lender, she had to use her last bits of savings to hire a lawyer. She readjusted her budget, completely cut out luxuries like eating out and investing in cable, and reinvested her time into a photography side hustle to bring in more cash. She also kept a close eye on her finances and savings via the cash envelop system, and by the end of 2018, she was debt-free.
It's always good to know where you are before creating a plan to get to where you want to be. So, let's get into some credit 101:
Your Credit Score: The Basics
A credit score, also referred to as your FICO score, is a number that lets lenders know how much of a risk it would be to lend you money. The score ranges from 300 (the lowest) to 850 (the highest). "It is a benchmark that lenders use to gauge how likely a person is to pay back what they owe based on past data. The more you pay things back and on time, the better your credit can be, which can help you borrow money at a lower rate for things you may need," Perez says.
There are three major credit reporting bureaus, TransUnion, Equifax and Experian, and each uses different reporting methods, thus you could have up to three different scores.
"The misconception is that we have one credit score, which is inaccurate. We have multiple, and it depends on what we're applying or aiming for," Perez says. "Your bank, for example, could be showing you a FICO score that might be conducive to opening a credit card, but your score might be different when applying for financing for something else."
Also, various things can impact your credit score, from late bill payments or rental debts to outstanding medical bills and tax liens. On the positive side, a long history of maintaining accounts in good standing, or taking on debt that you're able to manage and pay back consistently over time, are all actions that can contribute to a great credit score.
You can access your credit scores for free via AnnualCreditReport.com, and each report will have specifics on the types of accounts you have on record (such as credit card, mortgage, and student or car loans), the date those accounts were opened, information on your credit limits or loan amounts, as well as details about your payment history. Credit reports also have history on where you've lived and sometimes where you've worked. You'll want to make sure all information is up to date and accurate, especially since some information could be from fraudulent activity, a reporting misake, or an old debt of more than several years that should have dropped off.
For more information on your credit reports, look into resources offered by the credit bureaus, including apps that offer weekly updates on your credit score, credit report information, and credit products available to you. Other easy-to-use and super-helpful websites on understanding your reports are CreditKarma.com and USA.gov.
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Your Credit Score: The Good
The benefits of having a "good" credit score, which is one that falls generally at a 700 or above, is access to more housing options, more confidence when applying for a loan, and lower interest rates when you get approved. "Good credit allows you to secure better housing and, in some cases, will enable you to bypass having to put a deposit down if you rent," Perez adds. "If you plan on owning, good credit can help you secure a mortgage with better financing terms for you in the long-term. The lower your interest rate, the less you'll pay in interest over time."
"You'll feel less worried about getting denied, which can help you focus more on the things that matter, like negotiating a good interest rate."
But what about if you have no credit at all (i.e. no active accounts being reported to the credit bureaus or your credit history is so limited that there's no score)? Perez recommends getting a secured credit card, one that requires a deposit but offers other great benefits for people who haven't built credit.
"Get one at bank or financial institution that you're looking to have a long-term relationship with---one that offers access to other products. You might put up $500, for example, to open the account, and it will give you access to other products later that you might find beneficial such as home and auto loans."
She also urges women to put some serious thought and research into making decisions about what cards might be best for them. Looking to resources like Nerd Wallet or reading up on your current bank's credit card options (along with the fine print) are your best bet. Be sure to get details on annual fees, card closure policies, and payment protocols.
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Your Credit: The Bad
In some cases, with a credit score that is below 640, a lender sees you as a higher risk for default or nonpayment of a loan. "If you haven't been good at paying back the money you've already borrowed, lenders will be more hesitant to lend you money," Perez says. "Since they are lending you the money, your loan terms, whether it be a mortgage, car loan, or credit card, will be more favorable for the lender than they will be for you. And since the lender is taking on all the risk, their reward is being able to charge you with a higher interest rate. Interest over time can add up and take away money that could be going toward your future self, like investing for retirement."
Though cash is king, when it comes to buying a home or even renting an apartment, you may need a cosigner to vouch for a loan. "Getting someone else to cosign on anything can be pretty tricky, especially when you already have bad credit," she continues. "You may also be subject to paying high deposits, which can deplete you of cash that could be going toward things like your savings or retirement."
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Your Credit Score: The Ugly
In Perez's case, she was sued for an outstanding debt, and this is a common practice for some lenders as well as medical service providers and property management companies. Accounts that have reached collections stages and wage garnishments can not only deplete your pockets, but they can indeed negatively impact your credit score. A bad credit score can even affect your employment opportunities. "Sometimes employers will run a credit check on you before giving you the job," she says. "If your credit isn't in a good place, they may not extend the offer."
But you can take bad credit and turn your situation around. Perez recommends looking at all your credit reports and disputing anything that might be out of date or inaccurate. Then address the open accounts with balances that are past due. "Get on the phone with your lender. Explain your situation. See if they have a hardship program, and get the information on what that actually looks like. Get those details up front first, and then go from there." Perez also suggests freezing your credit card and pausing on use versus closing them, something that could negatively impact your credit. If possible, remain in communication with companies or lenders you owe to negotiate a plan for resolving your debt. "If you get the no the first time, continue to call to see if you can get yourself on a payment plan. That's better than [the lender] hitting up your credit because you're not making payments."
There are also credit-card debt relief options offered with the understanding that many are facing pandemic-related hardships, and community resources to get help in building budgets or exploring other debt-relief options.
Perez is also a big advocate of finding a way to earn more income via a side hustle and paying down at a pace that takes into account your current lifestyle and necessities. "Make sure you're prioritizing your bills. If you're in a hole and trying to make it out, it's time to put a budget in place and figure out where your money is going."
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Harlem Fashion Row's Fashion Show And Style Awards Was A Love Letter To The Culture
For over a decade, Harlem’s Fashion Row has served as a safe space for creatives of color to shine bright without fear of being dimmed. This week, HFR celebrated its 16th year of providing business solutions to retailers committed to equity for Black and Latin-X design talent. This beacon has served as a bridge between retailers and designers of color through collaborations, experiential marketing, pipeline programs, and brand strategy.
Set against the backdrop of the historic Apollo Theater in Harlem, the night was nothing short of amazing as a Black hip-hop orchestra serenaded the crowd with legendary tunes from “Big Poppa” to “Moment 4 Life.” It was pure magic as the scene was set to begin the Style Awards.
Tim Weatherspoon surprised his wife, Kelly Rowland, with a heartfelt speech as he presented her with the Fashion Icon of the Year Award. “I couldn’t pass up this moment to tell you that you’ve always been my icon,” the talent manager said. He went on to share that he scoured social media to pull some compliments from the toughest of critics. Weatherspoon said, “My assumption is that these are good ‘Kelly eats the girls every time. Fire emoji, fire emoji, fire emoji.’’’
As the Destiny’s Child alum accepted her award, she proclaimed her love for “that Black man.” Rowland was full of joy and adoration as she accepted the award, reminiscing on the days when she was a little girl from Texas in a group of country girls where stylists were not jumping at the opportunity to dress them. “Tina took matters into her own hands, and she dressed us. We learned what it felt like to start a trend. I remember what it felt like — the pride in it. I also know that ‘we’ start the trends and ‘we’ make what’s cool, cool. Fashion should be grateful for us.”
L-R: Tamron Hall, Stella Jean, and Brandice Daniel
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Then, the incomparable styling duo, Wayman and Micah, took to the stage to receive the Stylist of The Year Award. These two best friends were honored for their creative styling on the likes of Regina King, Tessa Thompson, Taraji P. Henson, Jodie Turner, and so many more. The partners in style applauded HFR’s founder, Brandice Daniel, for creating a table for us. “The table is marble and custom,” Micah exclaimed.
The fashion heavy hitters were absolutely in the building. Gabriela Karefa-Johnson, a New York-based stylist and VOGUE Global Contributing Fashion Editor-at-Large renowned for her eye for emerging designers and her narrative-driven approach to diversifying representation in fashion, accepted the Editor of the Year Award.
Tamron Hall sang the praises of the Designer of the Year recipient, Stella Jean, for being a visionary who not only creates whimsical pieces but takes a stand for what she believes in. “During this pivotal moment, one designer made a courageous and impactful decision. Stella Jean, an Italian-Haitian fashion visionary, took a stand in a bold and powerful move. Stella Jean pledged to return to the runway only when she would no longer be the sole Black designer on the Milan schedule.”
Johnny Nunez, the culture’s #1 photographer, reminded us of the importance of perseverance in the face of rejection while accepting the Photographer of the Year award. Just before his speech, Valeisha Butterfield, Google's Vice President of Partnerships & Engagement, gave Nunez his flowers for always making her feel seen and appreciated, which gave her the determination to be herself and take up space.
A$AP Rocky
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A$AP Rocky lit up the historic Apollo stage with his undeniable charm and intrinsic style. Dressed in a cardigan, Louis Vuitton tie, and a voluminous kilt while his head was adorned with embellished hair clips, he was walking proof that he’s a fashion, music, and culture innovator just like the name of the award he was receiving, the Virgil Abloh Award. For this Harlem native, it was a full circle moment as Abloh helped the rapper with his start in the industry years ago when he helped design his first album cover.
Designers Megan Renee, Nicole Benefiled Portfolio, and A. Potts showcased their transformational designs, which varied in style, texture, and color. Megan Renee's designs were inspired by unapologetic femininity. Nicole Benefiled Portfolio's designs were more geometric and modern, with a focus on clean lines and bright colors. A. Potts' designs were eclectic and playful, with a focus on mixed patterns and bold colors. All three designers created unique and eye-catching pieces that turned heads.
The show concluded with a beautiful tribute to hip-hop by the legendary Doug E. Fresh. The entire show was a celebration of all that is good about fashion, and it was a reminder of why the culture continues to inspire and influence people all over the world. HFR’s New York Fashion Week kickoff was a love letter to the culture, and it was delivered with nothing but style, care, and love.
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