Observations Of A 60 Year Roller-Coaster Debt Ride!
I’ve had great credit and I’ve had bad credit. I’ve also had NO credit. Each has had advantages and disadvantages. I’m sure you have already thought to question why great credit would have disadvantages and bad credit would have advantages. Seems strange doesn’t it, but it’s true!
Let me explain using my mistakes as examples.
I was married at 18 and a father at 19. We had a small apartment with a few pieces of hand me down furniture. Imagine my surprise when a salesman in a furniture store said we could by a new couch on credit. This was a new concept for me because being a child of the fifties my parents did not buy anything on credit except their house. I was the one to break the debt free pattern and it was a downhill spiral. We ended up furnishing our apartment on credit. Then there was the nearly new automobile that had monthly payments on top of rent on top of credit cards on top of loan payments on top of food, while you get the idea.
That went on until we discovered the greatest deal ever offered, the Consolidation Loan. With that loan we were nearly debt free, only one monthly manageable payment. We got that life saving loan and then did what anyone in our situation would do, we started charging again. All the way up to where we were deep in debt and into our second bill consolidation loan. And the cycle started over again. This was actually a 20 year journey. It was after filing bankruptcy that we decided to go debt free. This is where many people go astray and start charging all over again but we resisted… for a whole 7 years. That’s the magical number for all debts on your credit report to fall off and it’s also when you start receiving all those pre-approved credit offers in the mail.
Again we did what anyone if our situation would do, we started accepting the credit card offers with the promise to ourselves that we would only use them for EMERGENCIES. Funny how everything turned into an emergency. And that second promise we made to pay the card off on payday, well that didn’t happen either.
So after tasting debt freedom and loving it we again choose the bitter sting of heavy debt. Until we wised up again and cut up all the card. To be fair, some of those cards were already shut off do to late payments and all of them were at maximum interest. BTW, that interest was 29.9% on all that debt. Talk about an anchor dragging you to the bottom of the sea. We were on the express anchor!
So lets recap here.
* We started out debt free. That was good.
* We had great credit, that was bad.
* We acquired debt, that was bad.
* We filed bankruptcy and destroyed our credit and that was good.
* In 7 years our credit was fine but that was bad.
* We reacquired credit and that was bad.
* Again our credit is destroyed and again that is good.
* To sum it up, debt free is the only real state of euphoria.
There are many books on the market and many authors have made a great living out of teaching people to be debt free. Honestly, every day I hear numerous people say how much debt they are in but maybe once a year I speak personally to someone that is debt free. The folks in debt are unhappy and stressed. The folks that are debt free and usually happy and at peace. I know I was happy and at peace when I was debt free. That my friend is a worthy goal.
As a parting comment, I’ve seen people with a lot of credit that were miserable while many with no credit lived a great life of peace. It’s up to you to decide what life you want to live. BTW, heavy stress is the e-ticket out of this worldly existence. I for one have learned to move slower and smell the flowers, for free.
About the author: Tom Sheltron is a 20 year Credit Repair consultant and writer.
If you need to deal with the Credit Bureaus or have credit repair issue, please download a free copy of Credit Repair, Do it Right, Do it Yourself right now. The information is a valuable tool in your fight to repair your credit and raise you credit score. Don’t delay any longer. Download your FREE copy at: http://creditrepair4america.com/ Do it now and start your journey to having the things in life you deserve.
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Your credit score is going to determine a lot of things for you in the near future. If you don’t have a score that is good, you’re going to find that you will get bad car loan rates, a bad mortgage rate, or even nothing at all! This is something that you don’t want when you want to finance something as large as a house.
I had found with a friend before that he had a decent credit score. He was able to get a mortgage but he had to pay points on top of getting a larger interest rate. We had homes that were comparable in price, but what I had found out was that he had paid nearly $5,000 more for his mortgage at closing just because of his score.
If you’re curious about your credit score dropping, I wanted to give you some simple pointers that may cause your score to drop. By preventing these items, you will find that your score will either remain the same, or will rise slightly over time.
* Too many inquiries: If you have banks and other companies looking at your score, this can lower it. It’s going to show the other companies that you’re out there looking for loans or credit cards. These are what you call “hard” inquiries.
* Not paying: Whether you don’t pay your bill on time, or you just skip out on payments, this is going to hurt you significantly. You will want to make sure that you always try to pay the minimum on your credit card each and every month.
* Too many credit accounts opened: You don’t want to have a large amount of credit opened. What you’re going to find is that some companies are hesitant to lend to you if you have too much credit available.
* Debt to income: If you make $40,000 a year and you have $35,000 in debt, your debt to income ratio is going to be a little high. You will want to make sure that you narrow this debt down to increase your score.
These are just a few of the many items that can decrease your credit score. Every report is different.
To find out what else causes a credit score drop, I have provided a few extra tips that you can use to pinpoint what exactly hurt you.
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