Roadmap to Generational Wealth: Credit
What you need to know about Credit
Credit can affect whether you qualify for a loan and how much borrowing costs. A credit report shows your credit history. A credit score is calculated from information in that report, and you can have more than one score because scoring models and data can differ.
In 2025, 54% of Black adults who applied for credit were denied or approved for less than requested, compared with 25% of White applicants. The Federal Reserve says this racial gap has largely persisted for more than a decade. Discriminatory lending and unequal access to mainstream credit have also shaped credit opportunities for Black communities.
The NAACP supports equitable access to credit and offers Connecting to Our Financial Future, a resource that helps people understand, build, and protect their credit.
How to build and protect your credit?
- DO review all three credit reports regularly and dispute inaccurate information with both the credit bureau and the company that reported it.
- DO pay accounts on time and, when possible, pay credit card balances in full because carrying debt is not required to build credit.
- DO keep credit card balances low compared with your available limits because using a large share of available credit can affect your score.
- DO compare APRs, fees, and promotional terms before borrowing so you understand what the credit may actually cost.
- DO apply for new credit only when you need it because frequent applications can affect your credit scores.
- DO consider a secured card or credit builder loan if you need to establish credit, but review the fees and reporting terms first.
Don'ts:
- DON'T pay a credit repair company upfront or believe it can legally erase accurate and current negative information from your report.
- DON'T trust a lender that guarantees approval and asks for money before giving you the promised loan or credit.
- DON'T ignore accounts or inquiries you do not recognize because a free credit freeze can help stop identity thieves from opening new credit.