Mom's Got Money

CHAPTER 5How to Increase and Maintain Your Credit Score (and Why It's Important)

I am having my life screwed over by a Nordstrom credit card.

That's the message my friend Alex (not her real name) sent me, asking for help. Alex is a very cool single mom to two girls, and she's usually diligent with her money. For example, she bought her car with cash, she owns her own business, and she's great at finding beautiful clothes for great prices.

But, caught up in all the stress during the Covid‐19 quarantine, she completely forgot to pay her credit card bill, the first time in the history of having that card that it happened. Because of this one late payment, her FICO credit score dropped 81 points.

She said, “I spent the morning in tears wondering how I could have one late payment and it can drop that much. I don't know what to do.”

Alex was, in her own words, completely pissed at herself. I hated to see my friend upset, so I tried to get to the root of what was bothering her. “Are you trying to buy a new house soon? Is that why you're worried that your score took a hit?” I asked. “No,” she replied. “Well, then why are you beating yourself up about this so much?” I asked. After all, I knew if she just gave it a little time to recover, her score could bounce back.

But for Alex, the frustration went much deeper than that. She explained that when she was younger, she wasn't educated about money and she made some mistakes. Since then, she's worked extremely hard to learn about managing ...