LET'S TALK CREDIT, WOMAN TO WOMAN.
The Sequin Project is bringing together credit experts and a community of financially curious women (oh hey, that's you!). Get exclusive access to live events, credit pro-tips, and 1:1 coaching.
There are so many credit myths out there. Sequin's credit experts are here to help you get the facts straight.
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Annual Percentage Rate
It is what makes credit card debt some of the most expensive money you’ll ever owe.
Annual Percentage Rate (APR) is additional cost of borrowing money when you don’t pay your credit card bill off in full. Most credit cards charge interest that compounds daily, which means you pay interest on interest.
Pro-Tip: Pay your credit card statement in full every single month, to avoid paying high interest.
(also known as 'hard pull')
It shows up on your credit report and could impact your credit score.
A hard inquiry is when a lender “pulls” your credit report to make a lending decision. A soft inquiry, on the other hand, reviews your credit history at a high level but does not factor into a lending decision. A hard inquiry shows up on your credit report, a soft inquiry does not.
Pro-Tip: Check your credit score often via Credit Karma. It doesn’t affect your credit history.
How much you’ve spent using credit / total credit limit approved across lenders. It is a key factor in determining your credit score. You want to keep your credit utilization below 30% at all times, and below 10% if possible.
Pro-Tip: Pay off big expenses even before your credit card payment is due.
An authorized user is listed on another person's credit card but isn't legally responsible for paying the bill. Authorized users may not be building their own credit histories, which can hurt their chances of getting credit at favorable rates in the future.
Pro-Tip: Apply for a credit card in your own name, ASAP.
The process banks use to determine the terms of your loan. For credit card issuers, underwriting may include inputs from your credit report, income, and current credit lines with their bank to determine your credit limit and interest rate.
Pro-Tip: Review your credit report and dispute any incorrect or suspicious activity.
The least you can get away with paying on your credit card bill -- but will cost you.
The minimum payment is the lowest amount of money that you are required to pay on your credit card statement each month to avoid a late fee. However, if you only pay the minimum, you incur high interest on the remaining balance, which may become difficult to pay off.
Pro-Tip: Pay as much of your credit card balance as you’re able – ideally all of it.
What every woman needs to know about credit.
What We're Reading
What would it take to transform financial services to be more equitable for women? Here's a few things that would help.
REMOVE BIAS FROM ALGORITHMS
Can A Credit Card Be Sexist?
“These algorithms are trained on data that are a reflection of the world we live in or the world we lived in in the past,” says Meredith Whittaker, a research scientist at New York University and co-founder of the university’s AI Now Institute. “This data irreducibly imprints these histories of discrimination, these patterns of bias.”
DEMOCRATIZE FINANCIAL EDUCATION
FINRA Foundation Study On Gender Disparity In Credit
“Women are 5% points more likely to carry a credit card balance, 4% points more likely to make only the minimum payment, 6% more likely to be charged a late fee.” With financial literacy, the disparity disappeared.”
DECENTER MALENESS IN PRODUCT DESIGN
“Whiteness and maleness are silent precisely because they do not need to be vocalized. Whiteness and maleness are implicit. They are unquestioned. They are the default. And this reality is inescapable for anyone whose identity does not go without saying, for anyone whose needs and perspective are routinely forgotten. For anyone who is used to jarring up against a world that has not been designed around them.”