Let’s be real: damaged credit can feel like a scarlet letter. Whether it’s from a job loss, divorce, unexpected medical bills or student loans that never seem to shrink, millions of Americans—especially Black and Brown folks—know the weight of financial setbacks.
But bad credit isn’t a life sentence. It’s a chapter, not your whole story. And with the right tools, support and mindset, you can rewrite it.
“This shame narrative around bad credit is what keeps people stuck,” said Carla S. Morrison, financial coach and founder of Smart Credit Divas. “We need to talk about it more, without judgment, so people can take their power back.”
Why credit matters more than you think
Credit isn’t just about buying a car or getting a fancy rewards card. It affects nearly every aspect of your life—from renting an apartment and landing a job to the interest you’ll pay on loans or utilities. A low credit score can cost you thousands of dollars over time.
Your credit score, typically ranging from 300 to 850, is calculated based on five main factors: payment history, credit utilization, length of credit history, new credit and your credit mix. Even one missed payment or a maxed-out card can cause a noticeable dip.
The good news? Every positive step you take now can start turning things around.
Face the facts
“The first thing I tell my clients is: stop running from your credit report,” Morrison said. “Pull it. Read it. Know what’s on there. You can’t fix what you won’t face.”
Federal law allows you to check your credit report for free once a year from each of the three major credit bureaus—Equifax, Experian and TransUnion. Check for unfamiliar accounts, late payments, collections or outdated information. If you see something that’s inaccurate, dispute it. Credit bureaus are legally required to investigate.
Adrienne Taylor, founder of Tailored WealthSaver, warns against using credit repair companies that promise quick fixes.
“I encourage everybody—please, please, please—and I’m not trying to knock anyone’s hustle: do not go through credit repair,” Taylor said. “There is a whole entire law that people don’t realize. It’s called the Credit Repair Organizations Act, and it tells credit repair companies what they can and cannot do.”
Taylor said many people don’t understand that credit repair companies can’t do anything you can’t do yourself. “That’s one thing I make clear—we don’t do credit repair, but we do teach people how to build their credit,” she said.
Rebuilding the right way
The foundation of credit health is built on three habits, according to Taylor: making payments on time, understanding your credit limits and keeping your credit utilization low.
“An easy way to destroy your credit is not paying your bills on time,” Taylor said. “Another way is not understanding your utilization. If you have a $1,000 credit limit and you go above $300, now you’re over 30 percent of your limit—and your score will decrease over time.”
Taylor said that staying under 30 percent of your credit limit and paying your bills consistently are two of the most important things people can do to raise their scores.
Other tools to consider include secured credit cards, credit builder loans from local financial institutions and financial apps that help report on-time payments to the credit bureaus.
institutions, and financial apps that help report on-time payments to the credit bureaus.
A community-centered comeback
Tasha L., a Houston mother of two, saw her credit collapse after a divorce and job layoff. “My credit was in the high 400s, and I was embarrassed,” she said. “But I started small—paying a little more than the minimum, tracking everything, and using an app to monitor my score.”
After six months of steady progress, her score began to rise. Today, it’s in the high 600s, and she just bought her first car without a co-signer. “I stopped thinking of myself as ‘bad with money,’” she said. “That changed everything.”
Unity National Bank, Houston’s only Black-owned bank, also offers credit recovery and building tools. A bank representative said local banking institutions can be more supportive than payday lenders, offering programs designed to help customers rebuild, not trap them.
Give yourself grace
Financial damage doesn’t just affect your bank account—it takes an emotional toll too. Shame, stress and even depression are common.
“Debt can feel heavy, but avoiding it only makes it heavier,” Morrison said. “Talk about it. With your kids, your family, your friends. We break generational curses by breaking the silence.”
Your credit may be broken—but you are not. Rebuilding takes time, but it’s possible. Pull your report. Make a plan. Build better habits. And don’t be afraid to ask for help.
“It’s not about being perfect,” Taylor said. “It’s about being consistent.”
