March is National Credit Education Month, a time to spotlight the critical role financial literacy plays in helping individuals and businesses thrive. Understanding how credit works isn’t just about borrowing money—it’s about building opportunity, stability, and long-term success.
What Is Credit and Why Does It Matter?
Credit is the ability to borrow money with the promise to repay it later. Lenders evaluate your creditworthiness using information compiled in your credit report and summarized in your credit score. In the United States, major credit reporting agencies like Equifax, Experian, and TransUnion collect and maintain this data.
Your credit can affect:
- Loan approvals and interest rates
- Renting an apartment
- Insurance premiums
- Employment opportunities
- Business financing options
The Power of Financial Literacy
Financial literacy empowers consumers and business owners to:
- Make informed borrowing decisions
- Avoid predatory lending
- Budget effectively
- Build and protect strong credit profiles
When individuals understand how payment history, credit utilization, length of credit history, credit mix, and new credit inquiries impact their scores, they’re better positioned to manage debt responsibly.
Educational Resources to Get Started
Free and trusted resources are widely available:
- Annual credit reports at annualcreditreport.com
- Consumer protection and credit education tools from the Consumer Financial Protection Bureau
- Financial literacy materials for businesses from the U.S. Small Business Administration
This week, take the first step: review your credit report, set financial goals, and commit to building a strong financial foundation.
Find more financial literacy resources at https://rmaintl.org/consumers/