We work with clients every day who have experienced financial hardships, including problems with their credit. Because many people have been taught to view their credit score as an achievement that reflects their character or worth. This kind of thinking is stressful and can be harmful to your self esteem. We urge you not to conflate credit score with self esteem, but know that this sometimes can’t be avoided.

Check out our tips for dealing with credit score difficulties, managing money and separating your self esteem from your financial wellness.

How Important Is Your Credit Score?

Lenders and other financial institutions use credit scores as a tool to measure your financial wellness. So while your credit may not reflect your personal values or skills, it can affect your ability to borrow money, secure housing and get a job in certain industries.

Your Credit Can:

• Impact your ability to rent an apartment or buy a home
• Affect your ability to get a job, since some employers do credit checks
• Cause you to pay more for certain types of insurance
• Make it difficult to get a credit card
• Make you pay higher interest rates on loans
• Lead to being denied for a loan altogether

You Are Not Your Credit Score!

Plenty of hardworking people experience credit problems and financial difficulties throughout their lives. Often, these challenges arise through no fault of their own. Unexpected emergencies, medical bills, job loss and more can make it difficult to keep up with your bills. 

Also, some people encounter money problems because they weren’t informed about the risks before assuming a huge financial responsibility.  

1 In 4 Americans Have Acute Financial Stress

Unfortunately, having financial problems can affect more than your ability to borrow money, it can also hurt your self esteem and cause severe money-related stress that Dr. Galen Buckwalter refers to as financial PTSD. 

If you are struggling with debt and a poor credit score, it’s a good idea to separate your sense of self from whatever financial mistakes or challenges you are facing. Instead focus on the positive things you can do to take charge of your financial situation, including these tips for rebuilding your credit and self esteem. 

4 Tips to Improve Your Credit and Self Esteem

Tip #1 Focus on Building Good Habits

Financial problems are often the result of money habits that are not serving you well. On the other hand implementing a few good habits can repair and improve your credit and permanently change the way you approach your finances. 

Setting goals and establishing healthy budgeting and wealth management habits daily will transform your financial wellness over time. And the sense of accomplishment you’ll feel achieving your financial goals will be fantastic for your self-esteem. 

Tip #2 Don’t Ignore Your Money Stress

Ignoring stress of any kind can have serious consequences for your overall health. Money problems, in particular, tend to get worse when ignored. 

Rather than ignoring your money-related problems and the stress they cause, make a plan to strategically tackle your debt, improve your financial health and repair your credit score.  

Critical first steps include: 

1. Analyzing your finances so you know exactly where your money is going
2. Identifying your financial strengths and weaknesses
3. Making a list of financial priorities
4. Following an action plan to improve your financial health 

Tip #3 Make Dealing With Debt a Priority

Dealing with your debt should be your top financial priority. In fact, if you have a lot of unmanageable debts, you likely don’t have a credit score problem – you have a debt problem!

Focus on eliminating your debt and in the process you build a foundation of financial wellness upon which you can repair your credit. 

A debt consolidation solution could be the right strategy for your debt. 

Tip #4 Ask for Expert Help

It’s OK to ask for help if you are overwhelmed. It’s normal to feel stressed when you are struggling with debt. Luckily there are experts who can help you with both your financial concerns and your emotional ones. 

A therapist can help you to separate your financial wellness from your self esteem and identify how your mental wellness affects your money-related decisions.

A financial advisor can help you review and evaluate your finances and identify the habits that are harmful to your financial wellness. 

If money stress has taken over your life, talk to a therapist who can help you separate your financial wellness from your self esteem.

You Can Conquer Debt and Stress One Day at a Time

If you’re struggling with debt, don’t be afraid to ask for help. There are options available to you and by taking advantage of them, you can get back on track financially and regain control of your life.

When you pay off your debt, you recover more than just your credit score. You also recover your physical and mental health, and increase your overall well-being. So if you’re struggling with debt, take heart and conquer it one day at a time.