Credit scores can influence everything from the interest you pay on a loan to the credit cards you can qualify for. But not all strong scores are equal. A score that’s considered good may get you approved, but a great score could get you better terms, more offers, and lower long-term costs. That gap can have a big impact on your financial future.

Credit scores by the numbers

Most lenders rely on either the VantageScore or the FICO Score to assess creditworthiness. Both use a scale from 300 to 850 and draw on similar credit report data, but the way they classify scores differs slightly.

Although people often talk about a single credit score, everyone actually has many. You may have a FICO Score 8, a VantageScore 3.0, and several industry-specific scores, such as versions used for auto lending or credit card applications. Each score is calculated using the same core credit data, but different models or lenders may weigh certain factors more heavily. This is why your score might vary slightly depending on where you check it. There is some overlap, and many models consider scores in the mid-600s to low 700s as good, and scores above roughly 740 as great or excellent.

What a good credit score can offer

If your credit score falls in the good range, you’re likely to qualify for a wide variety of loans and credit cards. You may be approved for a mortgage, get an auto loan with a reasonable rate, or open a credit card with moderate rewards.

The catch is that you may not get the best terms. Lenders use risk-based pricing, which means you might face higher interest rates or fees than someone with excellent credit, even if you both qualify for the same product.

Good credit shows that you’re responsible with debt, but lenders may still view you as a moderate risk. That uncertainty can translate into slightly stricter lending conditions.

Why a great credit score makes a difference

When your score reaches the great (very good, excellent or exceptional) range, the benefits tend to become more noticeable. Lenders see you as a low-risk borrower. That means you may be offered:

• Lower interest rates
• Higher credit limits
• Faster loan approvals
• Access to top-tier credit cards and rewards programs
• Better terms on refinancing or balance transfers

Over time, these advantages can add up. According to the Consumer Financial Protection Bureau, credit score is one of seven factors determining the interest rate you are offered on a mortgage.

What separates good from great

Great credit takes more than just avoiding mistakes. It reflects long-term, consistent financial behavior. If you already have a good score, moving up typically means refining your habits rather than overhauling them.

Several key differences tend to separate the two categories:

• Credit utilization is typically lower. Many borrowers with excellent credit use less than 10 percent of their available credit.
• Credit history is longer. Lenders like to see that you’ve managed credit responsibly over many years.
• Accounts are older and well-maintained. Keeping long-standing accounts open contributes to score strength.
• New credit applications are limited. Applying for multiple accounts in a short time can reduce your score temporarily.
• There’s a solid mix of credit types. A combination of revolving credit (like credit cards) and installment loans (like car loans or mortgages) can be a plus.

For a full breakdown of how credit score factors work, see Credit Sesame’s guide to what affects your credit score at https://www.creditsesame.com/learn/credit-score/what-affects-your-credit-score/.

Moving from good to great

If your score is already in the good range, reaching great credit status may be a matter of consistency. Paying on time every month is essential, but it’s also worth paying attention to the details.

Start by reviewing your credit reports for accuracy. A single incorrect late payment could be holding your score back. Then look at your reported credit utilization. Even if you pay your balance in full, your issuer might report a high balance at the wrong time. Paying down balances before the statement closing date can help.

If your credit history is fairly new, time will help — as long as you keep accounts open and active. Avoid unnecessary hard inquiries, and consider using a tool that lets you get credit for nontraditional payments like rent or utilities.

Monitoring your credit over time is one of the most effective ways to stay on track. A free credit monitoring tool can help you follow your progress and spot issues early.

Why the extra effort is worth it

A good credit score is a strong start. But a great score can offer more options, better pricing, and long-term savings. Whether you’re borrowing for a home, financing a car, or simply trying to qualify for a high-rewards credit card, the difference between good and great may determine how much you pay or how far your money goes.

Building excellent credit doesn’t require perfection. It does require attention, patience, and the willingness to stay consistent even when the results take time. But for many people, the payoff can be well worth it.

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Confidence among America’s chief executive officers (CEOs) has just experienced its steepest drop since 1976, according to a new survey.

When concern rises at the top, it often trickles down. If business leaders are bracing for trouble, it may be time to prepare yourself. The good news is that a few smart steps now could put you in a much stronger financial position.

Survey shows a drastic drop in CEO confidence across the U.S.

The Conference Board is a nonpartisan, nonprofit organization that analyzes business conditions and provides insight to executives. As part of this effort, they keep a finger on the pulse of business leaders with regular surveys of chief executive officers.

A May 2025 survey found that CEOs have become more concerned about the economy in recent months. In fact, the decline since the previous quarter was the largest in the survey’s history, which dates back to 1976.

How worried are America’s business leaders? Here are some signs that concern is rising:

• 82% of CEOs said economic conditions had worsened over the past six months, compared to just 2% who said they had improved.
• 69% said conditions in their industry had deteriorated, compared to 7% who reported improvement.
• 64% expect economic conditions to decline further over the next six months, while only 18% expect improvement.

How bad could things get? 83% of CEOs expect a recession in the next 12 to 18 months. That is up from just 30% late last year.

What is driving these concerns? The top three issues cited were:

• Geopolitical instability
• Trade and tariffs
• Legal and regulatory uncertainty

Overall, economic concern among business leaders is rising quickly, and that level of caution could influence broader decisions affecting jobs, wages, and investment.

How CEO pessimism can affect the workforce

CEO concerns are not always accurate predictions, but they often shape real decisions that affect employees. When executive confidence falls, it can ripple through hiring, pay, and investment plans.

Here are some examples of how CEO pessimism might affect the workforce:

• Slower hiring. One of the first things that happens when leadership faces uncertainty is a delay or cancellation of hiring plans. This may already be happening, as job growth has been sluggish so far in 2025.
• Wage increases become stingier. As demand for workers eases and budgets tighten, companies feel less need to pay up to retain employees. Your next raise may be harder to come by.
• Employee perks are trimmed. One way to cut employment costs without the morale hit of reducing pay is to eliminate some employee perks. Everything from the company picnic to 401(k) matching contributions could be affected.
• Investment slows. R&D, new plant and equipment, and ad campaigns are all expenses that do not pay off immediately. CEOs may become more hesitant to invest in the future during periods of economic uncertainty.
• Layoffs start. Once demand slows, companies may look to reduce headcount to protect the bottom line.

To some extent, CEO pessimism can become a self-fulfilling prophecy. When companies reduce spending and cut jobs, it can weaken the broader economy.

How to protect yourself in an uncertain economy

When your company’s head is worried about the economy, it can affect you in several ways. In response, here are some things you can do to get ready:

• Build a little cushion into your budget. Whether it’s a smaller bonus, having your hours cut or even losing your job, economic concerns could affect your take-home pay. This would be a good time to take a look at your budget to see which costs you can reduce or eliminate.
• Rein in borrowing. If you’ve been borrowing regularly to make ends meet, it would be wise to break that habit. If the economy worsens, look for lending standards to tighten. It might become harder to get new credit, and existing credit limits might even be cut.
• Raise emergency savings. If you don’t have one, this would be a good time to start an emergency fund. If you already have one, this might be a good time to build it up. If the job market weakens, more people may lose work, and it may take longer to find a new job. A larger emergency fund could help you stay afloat.
• Work on your credit score. This could help you retain access to credit even if the economy weakens.
• Update your job skills. Look for ways to increase your value to your employer. That may keep you off any layoff list. It would also make you a more attractive candidate if you have to find a new job.

Taking steps to prepare for a rough economy may not change what executives do next, but it could make a real difference in how well you weather it. Building financial stability now can help you feel more secure, even if the road ahead is uncertain.

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Your credit score reflects more than just how you borrow. It also responds to how you manage bills, track spending, and make consistent financial decisions. When these actions become part of your daily routine, it can be easier to maintain good credit habits and support long-term financial health.

1. Turning on autopay across your accounts

Autopay helps prevent late payments, which can have a significant impact on your credit score. Even a single missed payment can leave a lasting mark. Setting up automatic minimum payments on credit cards, loans, and utilities can reduce that risk. You can still aim to make extra payments manually to pay down balances or avoid interest.

Try this: Set up autopay for the minimum amount due on all credit accounts, then pay off additional amounts manually when you know your cash situation later in the month.

2. Paying your credit card weekly instead of monthly

Credit utilization is the amount of credit you use compared to your total limit, and it plays a significant role in your credit score. Even if you pay your card in full each month, a high balance at any point in the billing cycle can increase your reported utilization. Making weekly payments helps lower your balance, which may help support your score.

Try this: Choose a frequently used card and make a payment each week to help keep the balance in check.

3. Assigning one subscription to a credit card

A recurring charge such as a streaming service can help keep a credit card active. Using a credit card for a small monthly bill and paying it off in full each month supports payment history while minimizing the risk of overspending.

Try this: Pick one stable monthly subscription, connect it to a card you rarely use, and automate billing and the full payment every month.

4. Choosing a credit-building tool

Some banks and fintechs offer tools like secured credit cards, rent or utility payment reporting, and credit monitoring. These options can help you build positive habits and strengthen your credit using accounts you already manage.

Try this: Explore available credit-building tools and see which one fits your needs and goals.

5. Putting a utility bill in your name

Utility payments are not typically reported to credit bureaus unless you use a third-party service that shares that information. Taking responsibility for a household bill may give you more control over payment timing, and opting in to a reporting tool can help include those payments in your credit history.

Try this: If possible, take over one shared bill, such as internet or electricity, and explore services that allow you to report on-time payments.

6. Living in one place longer

Frequent moves increase the risk of lost mail or missed bills, perhaps leading to late payments or collections. A stable address supports better bill management and may help lenders see you as more reliable. If moving often is necessary, digital billing and mail forwarding can help reduce disruptions.

Try this: When possible, stay at one address for at least 12 months. If not, switch to paperless billing and set account reminders.

7. Using rent reporting services

Most rent payments do not appear on your credit report unless you take action. Some third-party services allow renters to report payments even if they are not on the lease, but success depends on landlord participation and reporting practices.

Try this: Sign up for a rent reporting service that integrates with your payment method and check which credit bureaus they report to.

8. Reducing regular expenses wherever possible

Lower monthly costs can help ease financial pressure, making it less likely you’ll miss a payment or carry a high credit card balance. Staying on a shared phone plan is one example, but any recurring expense you can trim may support better money management.

Try this: Review your regular bills and look for options to share, reduce, or eliminate costs that don’t need to be individual.

9. Turning a hobby into extra income

Earning a little extra money from a hobby or side gig can help you cover bills without leaning on credit. A modest income stream may allow you to pay down balances, avoid overdrafts, and make more consistent payments, supporting healthy credit habits.

Try this: Sell handmade items, offer a service, or teach a skill online. Use the extra income to cover at least one regular expense.

10. Opening a credit card for strategic use only

If you have limited or no credit history, opening a new card can help establish a positive payment record. Assigning it to one small recurring expense and paying it off monthly keeps your utilization low and adds to your credit file. It is important to manage the account responsibly.

Try this: If you are building credit from scratch, consider a secured or low-limit card and use it only for one predictable monthly charge.

The way you choose to live affects your credit

Building credit doesn’t always require major changes. In many cases, simple lifestyle choices, from automating bills to managing shared expenses, can help support responsible credit use. By understanding how daily decisions affect your credit profile, you can take steady steps toward better financial health over time.

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This is one of those times when staying informed can add to your confusion. The news is full of mixed signals: on-again, off-again tariffs, speculation that the Fed may cut rates, unless it raises them, and sharp drops in the stock market followed by significant gains. It can make you feel like you’re being pulled in several directions at once.

It is not surprising, then, that recent weeks have shown signs of growing panic among consumers and investors. But panic is only likely to make things worse. In times like these, you should not be frozen by fear. Nor should you be pushed into rash decisions. The key is to act without panicking.

Economic dilemma: The Fed’s problem is your problem

The economic dilemma facing consumers was summed up recently by Fed Chair Jerome Powell. He described a “challenging scenario” in which new tariffs could drive up inflation while also slowing growth.

This puts the Fed in a bind. Its mandate is to both control inflation and support economic growth. Tackling inflation often requires raising interest rates, while supporting growth may necessitate cutting them. When inflation rises and growth slows simultaneously, it limits the Fed’s ability to respond effectively.

Powell’s concerns are echoed in recent consumer surveys. The Index of Consumer Sentiment, a widely followed gauge of consumer confidence, fell by 11% over the past month and is down 30% since December. The same survey found consumer expectations for inflation are the highest they have been since 1981.

Similarly, the Federal Reserve Bank of New York’s Survey of Consumer Expectations indicates that people anticipate higher inflation and a weaker economy in the year ahead. It also reveals that credit is becoming harder to get, which could slow spending for households that have been relying on borrowing to get by.

Like the Fed, many consumers feel caught between inflation and sluggish growth. This tension is showing up in both consumer and investor behavior. As fear and confusion grow, the challenge is to keep making smart decisions without panicking.

Making major purchases

Consumer spending is a clear example of recent economic confusion. While consumer sentiment has dropped sharply in recent months, retail sales jumped by 1.4% in March 2025. That followed a 1.2% decline in January. Economists believe the March rebound may have been driven by fears that tariffs would soon drive prices higher.

Many consumers may have rushed to make major purchases before those tariffs took effect. But with confidence in the economy falling, is that a smart move?

It could make sense to buy before prices rise, especially if it is a planned purchase and you can afford it without taking on long-term debt.

On the other hand, overborrowing to buy now may backfire. Credit card interest rates tend to be significantly higher than inflation, so carrying a balance could ultimately cost more than any savings from beating the price increase.

Retirement investments

The stock market has also reflected growing uncertainty. In the first 13 trading days of April, the S&P 500 recorded five daily declines of 1% or more. It also posted two daily gains above 1%, including a sharp 9.5% rise.

This level of volatility underscores the unsettled state of investors. Such market movements can lead people to make short-term decisions about what should be long-term investments.

It makes more sense to stay calm and look for opportunities. Price dips can present opportunities to acquire solid, world-class companies at lower valuations. It may also be a good time to rebalance your portfolio if market shifts have caused it to deviate from your long-term goals.

Avoid the temptation to jump in and out of the market based on emotion. Reactionary decisions often lead investors to buy high and sell low.

Credit maintenance

Consumer credit trends reflect many of the same tensions affecting the broader economy. Americans are still leaning heavily on credit cards, pushing balances to record highs. At the same time, delinquency rates are rising sharply. Many households also report that credit is becoming harder to get, as lenders tighten their standards. So, how should you approach this complicated relationship with credit?

It makes sense to take steps to reduce your reliance on debt. With lenders pulling back, this is a good time to focus on improving your credit score. If possible, build up savings that can help you carry through periods of uncertainty.

Do not ignore the problem; do not panic. Missing payments or avoiding creditors may feel like a short-term escape, but it often leads to late fees, penalty interest rates, and long-term damage to your credit. If you are struggling, contact your lenders to discuss a payment plan before the situation worsens.

Stay steady when the outlook is uncertain

When the economy sends mixed signals, it is easy to feel overwhelmed. But staying calm, focused, and practical can help you avoid costly mistakes.

You may not be able to control inflation, interest rates, or the job market, but you can control how you respond. Make thoughtful decisions, avoid panic-driven moves, and focus on actions that protect your long-term financial health.

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Economic ups and downs have been making headlines lately, with new tariffs, market swings, and rising costs putting extra pressure on household budgets. When inflation climbs or interest rates shift, your credit can be affected, sometimes in ways you don’t expect. Staying ahead of these changes starts with understanding how they might reach your wallet.

Managing credit during economic uncertainty is about more than just paying bills on time. It means watching how you borrow, spend, and protect your financial future, even when the headlines overwhelm. You can employ practical strategies to help keep your credit steady, no matter what the economy throws your way.

1. Know where your credit stands

The first step in protecting your credit is understanding your current position. Check your credit score regularly and review your credit reports for errors or unexpected changes. During periods of economic uncertainty, catching signs of fraud or reporting mistakes is useful.

Credit monitoring tools can help you stay on top of changes that might impact your score.

2. Track your spending patterns

When prices rise or income becomes less predictable, your budget might shift without you realizing it. Monitoring your spending helps you spot trouble areas before they lead to high balances or missed payments.

Use a budgeting app or spreadsheet to keep tabs on where your money is going and identify spending that can be trimmed or paused during tight times.

3. Keep credit utilization low

Credit utilization — the percentage of available credit you use — is a major factor in your credit score. Even if you make all your payments on time, high balances can still lower your score.

Aim to use less than 30% of your available credit across all cards. If possible, pay down balances strategically to reduce your utilization and free up credit in case of emergencies.

4. Avoid taking on new debt unless necessary

Lenders may tighten requirements or increase rates during uncertain times, making credit more expensive. Applying for new credit also triggers a hard inquiry, which can cause a temporary dip in your score.

If you don’t need new credit right now, it may be better to hold off. Instead, focus on managing existing accounts responsibly.

5. Set up automatic payments to avoid mistakes

One of the easiest ways to protect your credit score is to pay every bill on time, every time. Even one missed payment can hurt your score and stay on your report for years.

Consider setting up automatic payments or calendar reminders for all your accounts. This small step can prevent unnecessary damage, especially when your financial stress level is high.

6. Stay in touch with lenders

If you’re struggling to keep up with payments, don’t wait until you’re behind. Reach out to your lenders or creditors as soon as possible. Many offer hardship programs, forbearance options, or temporary adjustments that can keep your account in good standing.

Being proactive may help preserve your credit and reduce the long-term financial impact of a missed payment.

7. Watch for changes in interest rates

Economic instability often leads to fluctuating interest rates, especially on variable-rate credit cards and loans. If your interest rate increases, your monthly payments might rise too, even if your balance stays the same.

Check your statements for interest rate changes, and consider transferring balances to lower-rate options if available. You can compare options to see if you can reduce your interest costs.

8. Keep older credit accounts open

The length of your credit history matters. Even if you’re not using an old credit card, closing it could shorten your credit history and increase your utilization ratio, both of which may hurt your score.

Unless a card has high fees, keeping it open (and active with small, regular purchases) can support your score during unstable times.

9. Protect your identity and accounts

Fraud and identity theft often spike during periods of economic stress. Criminals may take advantage of distracted consumers or overwhelmed systems.

Monitor your credit accounts for unfamiliar charges and consider setting up alerts for suspicious activity. Tools can help detect fraud so you can respond quickly, before it impacts your credit score.

10. Make a backup plan for credit access

If the economy continues to worsen, access to credit could shrink. Banks may lower credit limits, tighten approval standards, or close inactive accounts.

To stay prepared, consider building an emergency fund — even a small one — and evaluating your credit options. Know which cards or lines of credit are most stable, and avoid sudden changes that could spook lenders or impact your score.

How to manage credit during economic uncertainty

Staying calm and focused during economic uncertainty can feel challenging, but your credit doesn’t have to suffer. You can protect your score through even the roughest economic waters by monitoring your accounts, staying ahead of payments, and avoiding high-risk financial moves.

Credit monitoring tools, personalized tips, and insights can help you make confident decisions when the economic outlook is unclear. Take small steps now to secure your credit health and keep your financial options open for the future.

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Living with debt can take a toll on more than your bank account. It can create ongoing stress, keep you up at night, and make it harder to plan for the future. But even if your situation feels overwhelming, there are ways to reduce the pressure.

These 10 practical steps may help you get debt under control — and in the process, bring more peace of mind. As a bonus, some of these changes might also support better credit over time.

1. Make a complete list of what you owe

It’s hard to tackle debt when it’s unclear where you stand. Start by listing every debt — credit cards, loans, overdue bills — along with balances, interest rates, and minimum payments. Having everything in one place can reduce anxiety and help you see what needs attention first.

2. Create a realistic monthly budget

A workable budget can relieve stress by giving you more control. Track your spending and look for places to cut back, even temporarily — like unused subscriptions or frequent takeout. Freeing up even a small amount may help you make meaningful progress.

3. Prioritize high-interest debt

Tackling the highest-interest debt first (known as the avalanche method) might reduce the interest you pay overall. Over time, that could ease financial strain and help your payments go further.

4. Consider the snowball method for momentum

Prefer a quick win? Paying off the smallest balance first (the snowball method) can create a sense of accomplishment and build motivation. Either approach could reduce stress — choose the one that fits your mindset and money habits.

5. Automate your payments

Late payments can lead to fees, stress, and potential credit harm. Setting up automatic payments for at least the minimum amount can help you stay on track and avoid last-minute scrambles.

6. Explore refinancing options

If high interest makes it hard to keep up, refinancing might help. Balance transfer credit cards, personal loans, or home equity loans could offer lower rates, reducing pressure in the short term. Just be sure you understand the terms and have a repayment plan. The Federal Trade Commission’s (FTC) Coping With Debt guide outlines several options.

7. Contact lenders before you fall behind

Some may offer hardship programs, deferments, or adjusted payment plans. For more information, the Federal Trade Commission’s (FTC) guide on How To Get Out of Debt offers helpful strategies and considerations.

8. Use windfalls wisely

Unexpected money — like tax refunds, bonuses, or gifts — can be an opportunity. Applying it to debt could lower your balance, reduce interest, and give you breathing room. Even small lump sums might make a difference.

9. Monitor your credit regularly

Checking your credit may help you spot problems early and track progress over time. It might not relieve stress immediately, but learning how credit scores work, staying informed can give you a sense of control, and over time, improved credit may open the door to lower rates. You can also explore FTC resources on credit and debt to understand better how credit works.

10. Avoid adding new debt

If you’re trying to regain control, avoiding new debt is key. That might mean pausing large purchases or being mindful about credit card use. Keeping balances low can help reduce stress and benefit your credit later.

How to stay ahead of changing rates

Rising interest rates and economic uncertainty can make it harder to pay down debt and easier to feel overwhelmed. But you have options. By organizing your finances, trimming interest costs, and building healthy habits, you may reduce financial stress and set yourself up for stronger credit in the future.

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Consumers are much less confident than they were a couple of months ago. How they act on their growing fears could determine the economy’s direction.

Every month, the University of Michigan publishes an Index of Consumer Sentiment. As the name suggests, this measures how consumers feel about the economy and its impact on their finances. Economists and investors closely watch this index to see whether consumers are confident, fearful, or somewhere in between.

The latest reading of the Index of Consumer Sentiment shows a sharp drop in confidence in February. When that happens, one concern is that losing confidence could hurt the economy, as nervous consumers spend less.

While that’s a valid concern, to some extent, the recent loss of confidence could be a healthy reality check for consumers. This may mean more consumers realize they must change their borrowing and spending habits.

Why consumer confidence is falling fast

The Index of Consumer Sentiment fell by 9.76% in February, following a 3.11% decline in January. Overall, the index is down by 15.86% from a year earlier.

So, what’s giving consumers the chills?

For one thing, concern about inflation has come back with a vengeance. The University of Michigan survey shows consumers expect prices to rise by 4.3% over the next year. That’s a full percent from January 2025 and a 1.7% higher inflation rate than the 2.6% consumers expected last November 2024.

To a large extent, this can be attributed to the anticipated impact of new tariffs. What’s harder to measure is the heightened uncertainty about government policies. The full extent of tariffs, layoffs, and budget cuts has yet to be made clear, and it will take some time for the impact to set in.

Will these sudden changes cause inflation? A recession? Or will it all turn out to be for the best?

Nobody knows yet. The problem is that uncertainty paralyzes decision-making. Whether it’s consumers considering a major purchase or businesses deciding whether to hire and invest, uncertainty often forces people to the sidelines as they wait and see how the game is being played.

How inflation and uncertainty are shaping consumer decisions

Given the nature of tariffs, concern about inflation is understandable. With significant policy changes being implemented at dizzying speed, uncertainty is also natural.

In this daunting environment, consumers would do well to focus on what they can control.

The latest Survey of Consumer Expectations from the Federal Reserve Bank of New York found that as of January 2025, consumers expected their spending over the next year to grow faster than their incomes and the inflation rate.

Perhaps the plunge in consumer confidence in February 2025 will put a damper on those spending plans. That might not be such a bad thing.

Over the past four years, consumer debt has risen by 23.9%, with credit card debt leading the way. By increasing spending faster than their incomes are growing and faster than necessary to keep up with inflation, many consumers have been living beyond their means.

Perhaps a little less consumer confidence will cause some to revisit their spending habits. In the short term, this could mean an economic slowdown – and possibly even a recession. However, if it leads to more responsible borrowing habits, it could put the economy on a more solid foundation in the long run.

4 financial steps to stay secure

As the consumer confidence survey suggests, economic uncertainty is on the rise. With inflation concerns and a potential slowdown ahead, focusing on what you can control may help you stay financially stable, regardless of where the economy heads next.

• Reassess your spending habits. Ensuring that expenses don’t exceed take-home pay can provide more financial flexibility. Finding ways to cut back on nonessential spending may also make it easier to build savings over time.
• Lower borrowing costs. Carrying a credit card balance can become costly, especially with high interest rates. When possible, paying off balances in full each month may help avoid added interest. Refinancing through a personal loan or a balance transfer credit card could offer a more affordable repayment option for those with high-interest debt.
• Strengthen job security. Government layoffs and economic shifts can make the job market more competitive. Keeping skills up to date, maintaining strong job performance, and considering how an employer’s business model may hold up in this environment could be beneficial. Those in industries heavily reliant on government contracts may want to assess potential risks.
• Optimize your credit score. A strong credit score can help maintain access to credit and secure better interest rates. With lending standards tightening and inflation keeping rates high, improving credit health may provide financial advantages in the long run.

Rather than letting economic uncertainty create stress, it may be helpful to use it as motivation to strengthen financial habits. Adjusting spending, managing debt, and maintaining financial stability could help turn falling consumer confidence into an opportunity for long-term security.

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The evolving role of credit in 2025

Credit in 2025 is more than just a number—it’s an important factor in financial security, borrowing power, and even job opportunities. As lenders adopt AI-driven underwriting models and credit scoring methods evolve, understanding what impacts your credit score is more crucial than ever.

Whether you’re managing debt, seeking new credit, or preparing for major financial decisions, keeping up with the latest trends in credit scoring and lending policies can help you stay ahead.

How AI and alternative credit scoring are reshaping creditworthiness

Traditional FICO scores are still widely used, but in 2025, AI-powered lending models and alternative credit scoring methods are gaining traction. To assess a borrower’s creditworthiness, more lenders are considering non-traditional data, such as rent and utility payments.

Consumers with thin credit files who demonstrate responsible financial behavior benefit from this. However, it also means that staying financially organized is more important than ever—even small, overlooked bills could play a role in future credit decisions. Free credit monitoring can help you keep track of your financial standing and identify opportunities to improve your credit.

Rising interest rates make good credit essential

As inflation pressures persist, interest rates remain a hot topic. Lenders are tightening approval standards, making a strong credit score critical for securing the best loan terms. A difference of even a few points in your credit score could mean thousands of dollars in savings over the life of a mortgage, auto loan, or credit card balance.

To gauge where you stand, checking your Sesame Grade, which offers the most complete view of your credit score and the factors influencing it, can provide insights into how lenders may view your creditworthiness and what areas you might improve.

Buy Now, Pay Later (BNPL) services and their credit impact

BNPL options have become mainstream, but many consumers still don’t realize their impact on credit. Some BNPL providers now report on-time payments to credit bureaus, helping build credit. However, missed payments or excessive BNPL use could negatively affect credit scores.

If you use BNPL services, ensure payments are factored into your budget and avoid overextending your finances. Not all BNPL lenders report to credit bureaus, so it’s essential to check how your payment history is being recorded. Reviewing your free credit report summary regularly can help you stay informed.

More frequent credit report updates mean fewer surprises

Credit monitoring is evolving, with real-time updates becoming the new standard. The major credit bureaus now offer faster updates, giving consumers more transparency into their credit activity.

Regularly checking your free credit score can help catch errors, detect fraud, and understand how your financial behavior impacts your score. Inaccuracies on your credit report could cost you money in higher interest rates or loan denials, so reviewing your credit regularly is essential.

Credit fraud and identity theft are on the rise

With data breaches becoming more common, protecting your credit has never been more important. Synthetic identity fraud—where scammers combine real and fake information to create new identities—is one of the fastest-growing forms of financial crime. According to the Federal Trade Commission (FTC), millions of Americans fall victim to identity theft every year, with financial fraud among the most common threats.

To safeguard your credit, consider:

• Freezing your credit with the major bureaus if you’re not applying for new accounts.
• Using credit monitoring services to get real-time alerts on suspicious activity.
• Setting up fraud alerts to notify lenders that additional verification is needed before opening new accounts.

How to stay ahead in the 2025 credit landscape

Navigating credit in 2025 requires proactive management and financial awareness. To keep your credit in top shape:

• Check your credit reports regularly and dispute errors immediately.
• Stay informed about changing credit score models and how they affect you.
• Use credit responsibly—avoid overextending yourself, and pay bills on time.
• Leverage tools like credit monitoring and fraud alerts to protect your financial future.

A Consumer Financial Protection Bureau (CFPB) guide emphasizes the importance of regularly reviewing credit reports to detect errors, prevent fraud, and improve financial health. Monitoring your credit can help you stay informed about changes to your score and take proactive steps to maintain or improve it.

Why understanding credit in 2025 matters

Credit remains a fundamental financial tool in 2025, influencing everything from loan approvals to job opportunities. As technology transforms how credit scores are calculated and used, staying informed and actively managing your credit can make all the difference in achieving your financial goals.

By keeping up with emerging trends, monitoring your credit health, and making smart financial decisions, you can position yourself for financial success in the evolving credit landscape of 2025.

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Disclaimer: The article and information provided here are for informational purposes only and are not intended as a substitute for professional advice.

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Tax laws evolve every year, and 2024 is no exception. Understanding the latest updates can help you maximize your refund, reduce your tax bill, and plan smarter for the future. The 2024 tax year filing is due April 15, 2025, the IRS deadline for most taxpayers.

Standard deduction increases

The IRS has raised the standard deduction for the 2024 tax year to adjust for inflation. The new amounts are:

• Single filers: $13,850 (up from $13,850 in 2023)
• Married filing jointly: $27,700 (up from $27,700 in 2023)
• Head of household: $20,800 (up from $20,800 in 2023)

If you don’t itemize deductions, this increase means you can reduce your taxable income by a higher amount, potentially lowering your overall tax liability.

Expanded child tax credit

The child tax credit remains at $2,000 per eligible child, but for 2024, a larger portion—up to $1,600—is refundable, meaning you may receive a refund even if you owe no tax. This change may benefit lower-income families who previously couldn’t claim the full credit.

Adjusted income tax brackets

For 2024, tax brackets have been adjusted to reflect inflation. While tax rates remain the same, income thresholds have increased slightly, reducing the impact of bracket creep and potentially lowering tax bills for some filers. If you received a raise in 2024, this adjustment may help offset the tax impact.

Retirement contribution limits increase

The IRS has increased contribution limits for 2024, allowing individuals to save more on a tax-advantaged basis. The new limits are:

• 401(k) contributions: $23,000 (up from $22,500 in 2023)
• IRA contributions: $7,000 (up from $6,500 in 2023)
• Catch-up contributions (age 50+): $7,500 for 401(k)s, $1,500 for IRAs

Maximizing contributions can lower your taxable income while boosting your retirement savings. If you’re expecting a tax refund, consider putting a portion into an IRA to maximize tax advantages.

Changes to itemized deductions

Some deductions have been modified for 2024:

• Medical expense deduction: The threshold remains at 7.5% of AGI, meaning expenses exceeding this amount can still be deducted.
• State and local tax (SALT) deduction: The $10,000 cap remains in place, though there is ongoing debate about potential changes in future tax years.

Increased capital gains tax threshold

Long-term capital gains tax rates remain the same, but income thresholds have been adjusted for 2024. This means some investors may qualify for a lower tax rate on their investment earnings compared to last year. If you sold investments in 2024, your tax filing will use these updated thresholds.

Energy tax credits for homeowners

New tax credits are available for homeowners making energy-efficient improvements. The Energy Efficient Home Improvement Credit allows for a credit of up to $3,200 for qualifying home upgrades, such as solar panels, heat pumps, and insulation. If you made qualifying improvements in 2024, you can claim credits on your current return.

How tax filing impacts your credit

Filing your taxes can have a direct impact on your credit and financial well-being. While your tax return itself doesn’t appear on your credit report, unpaid tax bills can lead to financial strain and even collection actions. If you owe taxes and don’t pay by the deadline, the IRS may file a tax lien, possibly making it harder to qualify for loans and credit cards. Additionally, if you receive a tax refund, using it strategically—such as paying down debt or building an emergency fund—can improve your credit score and overall financial stability.

What these changes mean for you

Depending on your financial situation, these tax updates may lower your tax liability or increase your refund. To maximize your benefits:

• Review your deductions and credits carefully
• Adjust your withholdings or estimated tax payments
• Consider maximizing retirement contributions
• Plan ahead for any investment-related tax implications
• Use tax savings wisely to reduce debt and improve your credit profile

Stay informed about the latest IRS guidelines if you’re filing your 2024 taxes by April 15, 2025. Understanding these updates can help you make informed financial decisions, whether maximizing deductions, reducing taxable income, or planning for the future. Taking proactive steps can put you in a stronger financial position for next year’s tax season.

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The post New tax rules for 2024 and how it affects your April 15, 2025 filing appeared first on Credit Sesame.

Government reports on consumer borrowing are starting to feel like the boy who cried wolf. Every quarter brings another warning—household debt is rising, borrowing is surging—yet the economy keeps moving, and people keep spending.

It’s easy to dismiss record-breaking debt as just business as usual. But in the fable, the boy was ignored one too many times … and in the end, the wolf was real.

Another quarter, another new record for rising consumer debt

The Federal Reserve Bank of New York recently released its Household Debt and Credit Report for the fourth quarter of 2024. The report showed that total household debt had reached a new high again.

Total household debt rose by $93 billion during the quarter to $18.036 trillion. This is the first time household debt has exceeded the $18 trillion mark.

If that didn’t make many headlines, don’t be surprised. It’s not big news for household debt to set a new record. It has now done so for 18 straight calendar quarters. That’s four-and-a-half years’ worth, during which time household debt has risen by $3.77 trillion.

How much debt is too much?

With household debt rising so consistently, it begs the question of how much consumer debt is too much.

The answer to that may not be a specific dollar figure. It’s more a matter of how well people are handling that debt. The disturbing thing is that Americans increasingly struggle with their debt payments.

The percentage of debt that became 90 days or more overdue increased in the fourth quarter for credit cards, mortgages, car loans, and HELOCs. Of the major loan categories tracked by the New York Fed, only student loans saw the transition into serious delinquency slow in the fourth quarter.

The biggest problem with payment delinquency is in credit card debt. The percentage of credit card balances that are 90 days or more overdue is now the highest since the end of 2011.

Back then, the economy was still recovering from the Great Recession. Now, the economy has benefitted from 11 straight quarters of economic growth and 49 consecutive months of job growth. If people have such trouble paying their credit card bills now, imagine what would happen in a recession.

Debt is getting more expensive

Not only is the total amount of household debt rising, but consumers took on more of the most expensive forms of debt last quarter.

Overall, mortgage debt represents the most significant type of consumer debt. It comprises $12.6 trillion of the $18 billion total. This is a relatively good type of debt to have – mortgage rates are generally low compared to other forms of consumer debt, and since this debt is used to purchase property, it is offset by an asset.

However, the largest debt consumers took on last quarter was credit card debt. Credit card debt rose by $45 billion in the fourth quarter. That’s far more than the $11 billion in mortgage debt added during the same period and nearly half of the total addition to consumer debt.

This is a problem because, with an average interest rate of nearly 23%, credit card debt is a costly form of consumer debt. Also, because it’s unsecured, credit card debt is often not offset by purchasing an asset with lasting value.

In short, credit card debt makes a hefty addition to consumer debt burdens. So, opting for more of this type of debt than any other was another negative trend in the fourth quarter of 2024.

3 things consumers need to do

National statistics represent what consumers as a group are doing. However, individuals can make their own choices about how they handle their debt.

Given recent debt trends, here are three choices you should consider:

1. Refinance high-interest debt. With its high interest rates, credit card debt is a prime candidate for refinancing. You can generally get a much lower rate from a personal loan or use a balance-transfer credit card if you can pay off your balance within the introductory rate period.
2. Start debt levels heading in the right direction. Large debt balances generally can’t be paid off all at once. Your first goal should be to reverse the direction of the trend – from rising balances to falling ones. If you get the trend heading in the right direction, eventually, you’ll reach your goal.
3. Protect your credit score to maintain access to affordable credit. As payment delinquencies and defaults rise, lenders are getting stricter about who they’ll give credit to. Working on your credit score can help you retain access to credit in this environment and qualify you for better interest rates.

The Household Debt and Credit Report didn’t offer much good news. When debt keeps climbing, and delinquencies rise, it’s a signal to take control. Now is the time to break the cycle and move in a better financial direction.

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The post Rising consumer debt keeps setting records, but can borrowers keep up? appeared first on Credit Sesame.