Your Credit Score is Your Adult GPA

Your Credit Score Is Your GPA for Life

In recent years we have been disproportionately affected by the housing collapse. Borrowers with subprime loans defaulted at alarming rates, destroying household wealth. Moreover, the Great Recession forced many to deal with the worst credit-battering scenarios–bankruptcies, foreclosures, property repossessions, judgments, and collections. FICO reports that a foreclosure can remain on a credit report for seven years and lower a score by 85 to 160 points, a penalty second only to bankruptcy.

We must take action to reverse the trend. Far too many of us don’t know our credit score or information contained in our credit reports even though they’re readily accessible online or obtainable from the three credit bureaus–Equifax, Experian, and TransUnion–free of charge, annually. Through that one action, we can review discrepancies and identify errors and problems in order to take corrective action. We must monitor our spending habits and uncover potential red flags on credit-based expenditures through alerts we can set up with our financial services firms. Moreover, we must do no less than protect the next generation not only by reviewing their financial activities as early as their collegiate years but by mandating they take credit literacy courses to help them build a strong credit history.

It begins with us. We must seize control of our finances. Many have already missed out on prime wealth-building opportunities at a time when the cost of money couldn’t be cheaper. So let’s buckle down and get serious about managing our credit. It’s not only possible but an imperative for all of us to raise our GPAs.