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Credit score hits can ding your self-esteem

Allie Johnson

April 9, 2014

When I first looked at my new, lower credit score back in February, I was sure it couldn’t be right.

Then I realized it was: A few factors had combined to take my formerly excellent score of about 780 down to around 700. When I got over my initial surprise, I got a second one: how bad it made me feel.

Over the past few years, I hadn’t given much thought to how shaky credit can affect a person’s self-image. Since my credit had been pretty solid for a while, the topic hadn’t exactly been top of mind for me.

But, apparently, it doesn’t take much to go from being a credit superstar to, well, a second-class citizen in the land of credit.

In my case, a few things had happened. I applied for new credit a few times during a recent kitchen remodel. That was the first hit to my credit. My husband and I wanted to get pretty granite countertops and a few pricy appliances, and we wanted to pay for them over time. So I got a zero-percent credit card deal. But that meant I was carrying a balance — a pretty hefty one. My debt-to-credit-limit ratio went from excellent (we used to pay off our cards every month) to not so good. That was the second hit to my score.

And, finally, my husband made a very late payment on his personal card (he tends to space out about these things), and that was reported on my credit because I was an authorized user. I took myself off the card and am still in the process of disputing that item – but, in the meantime, it’s listed as one of the items negatively affecting my credit.

I know that as soon as I get that ding taken off my credit and we pay down our remodel debt, my score will jump back up. But the fact that it’s so easy to go from great to flawed in the eyes of lenders makes one thing hit home for me: My credit score doesn’t define me. Having a great score doesn’t mean I’m perfect, and having an iffy one doesn’t mean I’m a loser.

As Ryan Greeley of the Better Credit Blog points out, it’s easy to let your credit score affect your sense of self worth. He writes that having a bad score in the past made him feel marked as someone who could not be trusted. I felt the same.

But, as he points out, your credit score is just a number. There could be many reasons why it is what it is. Maybe you got hit with medical debt or lost your job. In my case, it wasn’t as though I suddenly went crazy buying things I couldn’t afford or that I decided to stop paying my bills.

So, instead of stewing about a bad score, the best thing to do is to take steps to make it better — as Greeley did. His first step? He got a secured card, basically building from the bottom and eventually meeting his goal score of 775.

But a less-than-perfect score doesn’t always mean you’re starting from scratch. As this post on DailyFinance.com points out — and as I learned — scores can fluctuate by quite a bit.

If your score dips, as mine did, find out why. DailyFinance.com gives a list of common reasons — the top one, “Did you max out any credit cards?” applies to me. Your credit report will help you here by showing you a list of negative factors affecting your score. Once you have that information, you can stop taking your score personally — and instead work on fixing it.

As for me, I’ve taken every action I can to make my score better, and I’m continuing to chip away at our remodel debt. So, I look forward to being back in the high 700s again soon — and regaining the good feeling that goes with excellent credit.