Image Credit: Joy M.
Keeping up with your credit and making sound financial decisions is a necessity for everyone today. Oftentimes, articles about finance and credit overlook the specific needs of women. Good credit is certainly important for everyone, but men and women don’t always take the same approach when it comes to their credit. Regardless of marital status, it is important for women to take an active role in financial matters. This includes smart financial planning, performing a credit score check, and an understanding of what’s a good credit score.
Common Credit Mistakes Women Make
Much financial advice is the same regardless of gender. Men and women both can make the same mistakes with their credit, such as taking on too much debt, not paying down their balances in full, and so on. However, some financial experts believe that certain women are more susceptible to certain credit mistakes. In particular, it’s often mothers who are more likely to make particular financial mistakes that can prevent them from having good credit scores.
One credit mistake women sometimes make is putting others first or being too generous with their own credit. Heather Jarvis, a student loan expert, says that mothers often “borrow more than they should to finance their children’s college educations.”One important step in financial planning for women is to make sure their own finances are on track before taking out loans that will help others. Mothers are also sometimes more likely to co-sign for loans. The act of co-signing can hurt their credit because they become legally responsible for those loans. If the other person doesn’t make payments, this can prevent the co-signer from being in a good credit score range.
Another common credit mistake that women make is relying too much on their partner’s credit. Some women assume that a spouse’s good credit score means that they also have a good credit score. However, a divorce can leave a woman’s credit score in shambles if she doesn’t have her own credit line. It’s important for women to understand that their credit score ranges are not directly tied to their spouse.
The Importance of Credit Scores for Women
Regardless of marital status, good credit scores are an important aspect of financial planning for women. Even if a spouse has a high credit score, every woman needs her own line of credit and her own high credit score in case she goes through any life-changing events. A divorce is just one major change that can affect a woman’s overall financial standing. The death of a spouse can also have a big impact. Because women often earn less than men, they can face more challenges financially. Losing a spouse can have a huge effect, especially on older women who are getting closer to retirement. Having a high credit score and being aware of sound financial planning can help women overcome these life changes.
A divorce often means the need to refinance an existing loan or secure a new loan altogether. It can also lead to the need to rent. By having a high credit score, a divorcee can ensure that she will get the best loan rate possible or maximize her potential to secure a desirable rental property. The same can happen to a widow. High credit scores can help in the process of refiguring one’s financial life.
Regular Credit Monitoring
It’s important to regularly perform a credit score check regardless of your gender or your financial habits. A good credit score(typically, considered to be 700 or above)is a gateway to getting the best rates on loans. It also shows an overall picture of your financial health. When checking your report for the first time, it can help to have your credit scores explained to you by an expert. By checking your credit score on a regular basis, you can make sure you are handling all elements of your credit well. This is especially true for women with spouses who have high credit. Rather than just depending on a spouse’s credit rating, it’s important for women to keep their credit scores as high as possible. This can help with the best loan rates for new homes, and it can also be incredibly valuable for the woman down the road.
While sound financial planning and good credit scores are essentially the same for both men and women, oftentimes women aren’t prepared when it comes to these important matters. By understanding their credit habits and checking credit scores on a regular basis, women can put themselves in a good financial position. There are many situations where a good credit score can be a big advantage, and the only way to know your credit score is good is to check it on a regular basis.
