Thursday, July 17, 2008
The Basics of Credit
During these hard economic times, worry and fear grip many people. Rightfully so, gas prices are at an all time high, foreclosures are spiking every month, and Americans have a lot of consumer debt. We live above our means and charge everything. No wonder the total amount of consumer debt in the United States stands at nearly $2.5 trillion dollars Not many people have a full understand credit. I didn't either. My story began at the tender age of 17 when I received my first credit card offer in the mail. Eager and excited to have a good sum of money at my disposal, I mailed off the application on my 18 birthday. No one ever talked to me about credit or explained how important it would be in life. I thought having credit meant opening up a lot of accounts. So off I went opening up multiple charge accounts. I started out good paying the minimum balance, however, the more I charged the bigger the minimum balance became. I was taking out cash advances just to go out with my friends. Once my first card was maxed out, I started with the second even using that to pay the bill towards the first. Before long, both cards were maxed out and I didn't have a means to pay. I worked part-time and I had become overwhelmed by the mounting debt. To make a long story short, my credit was ruined! I really didn't think twice about it, what did I need my credit for? I lived at home, had a car that was paid off and hadn't planned on making any big purchases. I had never heard of the word FICO. Fast forward 6 years when I started my search for an apartment. No one would rent to me with horrible credit. As a result, I worked two jobs to pay down my debt. But that wasn't the end of my dilemma, just because my credit was now Paid it was still showing up as a negative account. I was oblivious of this information at the time. It took several more years once I got into the Real Estate field where I really learned all I ever needed to know about credit. It was then too that I started dating my husband Mr. Loan Officer. I never fully understood why he was so obsessed about his sqeaky clean credit history. We were from two different worlds, I was the financially irresponsble one and he was so on point and target about paying bills on time. This was me then, now I am a changed person. I have learned so much about credit and would love to share some tips I used to get my credit back on track. I will post a different topic every day as it relates to my journey to Rebuilding my credit.