Trade The Journey

Trade The Journey

Debt

You should avoid it at all costs!  Sounds easy enough.

Attending college, looking back, was a great experience. I got to interact with people from different countries, cities and in some cases “planets”. While touring the college, I saw a wells Fargo tent and they were advertising a free checking account and a credit card. The balance on the credit card was $1,500.

I knew nothing about finance or credit. I had a limited understanding of money and the only thing I knew about credit was what my mother told me. “Stay away from credit”. At that age, you don’t listen to your parents as they are telling you something even when you should. You do things your way. She told me, when she attended college they offered her a credit card and she got into trouble with debt.

Years later, I realized why I should have listened to my mom when she told me to stay away from credit. I signed up during my first week of college and it was great. You could pay for something without paying for it. I could charge and charge again. The minimum payments were only $57 and I could afford that.

Of course, as your situation changes, the payment options change as well. I could no longer afford to make payments and my credit sunk. I avoided the calls and the letters. All of my accounts were delinquent.

Time passed and the only loan I could get was at a payday loan place. After I began learning about finance, I begin to call the credit companies. I loaded credit monitoring apps and began to become interested in repairing my credit. The first thing I noticed was that there were some medical accounts on my credit statement that were not accurate.

I protested and they were removed. Then the old personal credit accounts fell off of my account due to write offs and in California, they no longer affect your credit score after a certain amount of time. I then called the student loan companies, and told them of my situation. I worked with them on a forbearance and in some cases a retroactive forbearnce. I was left with 6 late payments on my credit report. 

Even that could have been avoided if I maintained contact with the student loan companies and applied for payments based on my income. From then on, I made on time payments and was able to repair my credit. I repaired my credit well enough to get a great car with payments I could really afford.

I also made sure that my car payments and the on time payments would be reported to the credit bureaus. They would. In three months, I went from a “D” to a “B”. 

Soon, I’ll be in the high 700s’ and that’s from the lowest score possible. Yes, you should avoid credit. Yes, you should make all the right decisions. But sometimes you make mistakes and sometimes using credit is an advantage.

Learning how to better manage credit should be the ultimate goal. That way if you are able to avoid it, great and if not, great.

Thoughts?

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