5 Myths About Credit Debunked for Native Americans

Understanding credit is crucial for navigating today's financial landscape. Unfortunately, misinformation and myths about credit can create confusion and prevent individuals from building a strong financial foundation. This listicle debunks five common myths about credit, specifically addressing concerns relevant to Native Americans.

Myth 1: "Native Americans don't need credit."

Reality: Credit is essential for everyone, regardless of background or income level. A good credit score can help you access affordable loans, rent an apartment, secure a credit card, and even get a job. Building credit is an important step towards financial independence and achieving your goals.

Myth 2: "Using credit is always bad."

Reality: Credit can be a valuable tool when used responsibly. It allows you to make purchases when needed, build a positive credit history, and access financial opportunities. The key is to use credit wisely, pay your bills on time, and keep your debt manageable.

Myth 3: "Checking your credit score hurts your credit."

Reality: Checking your own credit score is a soft inquiry and does not affect your credit score. It's important to monitor your credit report regularly to identify any errors or signs of identity theft. You can get a free credit report from each of the three major credit bureaus annually.

Myth 4: "I can't build credit without a traditional bank account."

Reality: While having a bank account can make building credit easier, it's not the only option. You can explore alternatives like credit unions, CDFIs, secured credit cards, or credit-builder loans to establish a credit history.

Myth 5: "Credit scores are biased against Native Americans."

Reality: Credit scoring models are based on your credit history, not your race or ethnicity. However, systemic factors like limited access to banking and financial education can create challenges for Native Americans in building credit. NFDC is committed to addressing these disparities and empowering Native Americans to achieve financial wellness.