Look. I will be the first one to tell you -- as someone who is attempting to repair her very damaged credit -- that trying to fix credit is much harder than I ever thought possible. I had collections on my credit, for very small amounts, mind you, that I have been trying to remove for literally years. I am talking $100 for a library book, people. But my bad credit goes back all the way to the ripe old age of 19.
Credit Image: IntangibleArts on Flickr
I remember in college, my very first credit card. The person at Target, which is crack to teenage college girls, asking if I wanted to save 10% on my purchase. Sure! I naively replied. Ten minutes later, I had a credit card with a $300 limit. And instead of leaving with whatever item I had gone in there to purchase in the first place, I walked myself back into the home decor section and proceeded to immediately max out my card, purchasing all kinds of goodies for my dorm room. I had a job making barely any money, I had no idea how to be financially responsible, but I had the cutest dorm room on the hall! Due dates came and went, and I didn't even pony up the minimum amount due. Suddenly, I had a collection on my very new credit for $500 (I am guessing, I didn't have a clue what was happening to my credit at the time.) I got notices in the mail, phone calls. What was my solution? Ignore and deny. That became my MO for everything, mainly because I had no money, and I didn't how how to pay it back, so instead of talking to them and working something out (which took me a good decade to be good at and boy, am I a pro at it now), I just ignored it. I moved out of my college apartment with a remaining AT&T phone bill. Ignored/sent to collections. I applied for another credit card, sent to collections.
For years, I just never seemed to care what I was doing to my future ability to get a car or a home. And I never wanted to know, either. I knew it was bad but never wanted to face the facts and look at reality, so I just kept ignoring. That didn't mean it wasn't on my mind constantly. I would feel guilty spending money on anything when I kept getting notices and never opening them, knowing I could probably be spending the $30 I was about to spend going out out on paying something for my debt. But I just never did. I attempted in 2006 to fix my credit and was surprised to find that while it was not as bad as I thought it was -- I was probably only in debt about $4,000 -- it was so many derogatory accounts that I got overwhelmed with it all and gave up. I was scared to call a creditor, as they'd scared me into thinking they could garnish my wages (ILLEGAL!) so now, I was petrified my checks were going to start to get taken from me. I lived in constant awareness of my financial situation but never doing anything about it. I even allowed myself to think, when I began reaching my late 20s, that no man would ever accept me with a credit score of 550 (or whatever it was), and I continued to date horrible men who treated me badly. I even began getting swindled by fake collections bills, because I had never bothered to ensure which ones were actually bills I owed.
When I turned 29, I met the man I was going to marry. He and I both had bad credit, but surprisingly, no really large amounts of debt. We didn't have credit cards, we lived in apartments, and we were forced to begin thinking about our future. Within the last two years, my mindset has changed 180 degrees. I began paying back the debt I owed and attempting to remove the negative off our credit. We started paying things on time. We both got credit cards with $300 limits that are paid off each month. We still haven't had much of an increase in our credit score, which is frustrating, but I can tell you exactly what is on our credit, exactly what our score is and exactly which accounts are
accurate, are reported, and can fix a mistake in half a second. The knowledge I've gained in the past two years when it comes to collections, my rights as a consumer, things I owe and things I don't owe, has been invaluable to me. I am no longer afraid to answer my phone, which barely rings with 1-800 numbers I don't recognize any more (and are usually telemarketers, not debt collectors). When I get a notice in the mail from some place I've never heard of, I call them immediately instead of being scared to deal with it. And just because I am being financially responsible does not mean things do not ever come up anymore. I just received a bill from a collector for a bill that I'd paid several weeks prior, which was a mistake on their part. I sent over proof of payment and have been speaking with them to make sure it does not get reported. So, due diligence is something I've learned from this experience, and I am so grateful I did.
While the last two years have been a pride-swallowing, large-dose-of-reality time of our lives, I am grateful that during my 20s, my bad credit prevented me from getting into large amounts of debt. There came a time when no one in their right mind would have given me a credit card. I didn't have the ability to purchase a very expensive car or buy a house I wasn't ready for. I had no business doing any of those things, and fortunately for me, I couldn't even if I wanted to. Instead of staring down the face of $100,000 worth of debt, like some people are, I was looking at $4,000 that I actually negotiated down since the debt was so old. I also learned how to deal with situations and actually won judgments from creditors who were illegally trying to scam me out of money. I have also been able to help others who have fallen prey to collection schemes. So, for that, I feel as though having bad credit has really saved my financial life.
We only buy things with cash now and only things we can afford. We are unable to live beyond our means because we have learned it is just not worth it. We are saving up to buy our next car with cash so we do not have debt we will owe. We are currently leasing our dream home from wonderful people who are in no hurry for us to purchase the home while I am trying to get our credit score where it needs to be for a good interest rate on our mortgage. Life can be great after going through credit disasters, if you learn the lessons you should learn from it, which I feel like I have!
If you are in a situation of dealing with creditors and you aren't sure where to begin, please visit my blog, Sharing My Jennarocity, where I did a 3-part series on "How To Deal With Creditors and Pay Off Old Debt.
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