topic How did you learn your credit habits? See the results of this poll. in Community Polls

How did you learn your credit habits? See the results of this poll.

Barry — Mon, 03 Nov 2008 15:45:00 GMT

Please vote and share your own story of how, where, when, and from whom you learned how to handle credit -- both for better and worse!

Poll Results:
* My experiences (54%)
* Research (online/books) (29%)
* Family member (17%)
* School/University (0%)

Total votes: 52

Message Edited by Barry on 11-03-2008 07:45 AM

Re: How did you learn your credit habits?

Anonymous — Thu, 02 Oct 2008 15:33:53 GMT

My parents.

They taught:

1. Always keep a budget, and showed me what should be on that budget.

2. Live completely debt-free, don't buy something you can't afford which means you should always pay cash and have no car payments, house payments, and only one small credit card for emergencies. (Partially right, but you should really have the cash on hand, and pay it off over time so you will have a FICO score that feels happy)

3. Bills should be always be left in their envelopes, unpaid to pile up on the counter for months at a time (despite the pretty budget that is tacked to the fridge just to the left of them).

4. The easiest things to cut out of your budget when money is tight, are eating out, and cable. (CORRECT!)

------------------------------------------------------------------------

I took all of the advice from #1, lived by #2 until I realized that was FICO-faulty, and was too **bleep**-retentive and perfectionist to ever get caught up in the pain of #3. And of course #4 always comes into play when things get hairy. Still had a blown FICO score, but I am proud to say it was because I was utterly poor with no insurance & 2 kids for a long time, and my ONE credit card was stolen & misused by an ex.

Re: How did you learn your credit habits?

haulingthescoreup — Thu, 02 Oct 2008 15:54:09 GMT

I got the outlines from my parents --live within your means, continually balance your checkbook (my mother grimly carried forward a small balance error for 11 years before my father convinced her to adjust her own balance to match), hang on to everything. They never taught me; I guess they just modeled it.

I did the first two fine, but I'm a disaster at the third.

I developed my own habits after shredding what I thought were MasterCard approvals for several months before finding that they were the statements for a new Sears card. Signed up for Scorewatch, saw the 30-day hit (Citi was merciful) and saw the 50-point score drop, and decided to start acting like a grown-up.

Other than common sense, literally everything else credit-related (knowledge, habits, etc) I learned here.

Re: How did you learn your credit habits?

Anonymous — Thu, 02 Oct 2008 20:48:17 GMT

While I now know that my parents never carry CC debt and generally have very good budgeting and savings habits, I never knew that growing up. It was never talked about and questions asking for specifics were usually met with "none of your business". So what I viewed were wallets full of CCs that were whipped out for every purchase and a large stack of bills that would arrive each month.

When I got my first major CC at 20 I was gleefully amazed that I could charge a ton and make a tiny payment. Yes, I was that dumb and naive when it came to CCs. Still, I (and eventually my DH with the same level of knowledge on the topic) muddled along and thought we were doing everything right. The bills got paid every month and the offers and CLIs kept flooding in for years. But a FICO score was foreign to us and we were under-prepared for emergencies.

Eventually the 911 combo hit us hard - job loss, car that gave up, and major medical bills, despite having insurance. What had been manageable debt quickly became unmanageable. We were still able to make the minimum payments for months, but ONE late payment to one CC and the horror that is universal default hit us extremely hard. Most of our CCs jacked our rate sky high which greatly increased our monthly payments and it was all down hill from there.

Eventually I made the next horrific mistake and entered a debt management program. In the end it not only didn't save us any money, but they also made some of the payments late which made an already bad situation worse. If I had found this site sooner, I would have gone directly to the CC companies and tried to work out a manageable payment plan at the first sign of trouble. If I had found this site even sooner then that, I wouldn't have had the huge number of cards and available credit to begin with and would not have carried such large balances!

Too little, too late and now we are paying for the mistakes, educating ourselves, doing what we can to make positive improvements to our FICOs (we've crawled from the very low 500's to low 600's so far), and making sure our child is much more knowledgeable then we were before going off to college and getting showered with CC offers.

Re: How did you learn your credit habits?

Schoolbuskid — Thu, 02 Oct 2008 21:51:10 GMT

Well i think i became interested in my credit when i seen, my mother struggling to get credit, as i grew up! I knew that i did not want be in that type of situation, so i decided to enlighten myself and thats when i began searching the internet. I read and read, on ways to improve your credit, good budgeting skills, etc. So eventually i stumbled upon myFICO.com and learned so much more.

I wish i had more self control, i allowed my self to run my credit cards up, and have been slow to pay them down! But i did learn a lesson, and i dont think i will do that again, i will be so happy when i can get my cards down to a ZERO balance!

Re: How did you learn your credit habits?

Lel — Thu, 02 Oct 2008 22:25:51 GMT

By osmosis, I acquired my financial habits from my parents. I don't recall ever having a sit-down chat with them about debt, loans, interest rates, etc., but they were always very fiscally responsible. They never gave me an allowance, but they did permit me to get a paper route as a kid to earn some spending money of my own.

Re: How did you learn your credit habits?

Anonymous — Thu, 02 Oct 2008 23:52:10 GMT

I think Lel is right on here; most people inherit their parents credit habits - for better or worse.

I came out of college with $3K in credit card debt and it probably took me 3 years to pay that off. It was just another bill, like water or PG&E bills. I never spoke about credit with my parents until it became a problem when I was in my mid 20s and a quarter of my paycheck was going towards paying my credit card bills each month.

I didn't really learn about managing my credit until I joined myFICO a few years ago. Now, I deal with the topic of credit every day! It sad that the US devotes so little toward financial education in our school systems. I've vowed to talk to my kids about money at an early age. Hopefully, they'll have an understanding of money and credit that it took me 30 years to gain.

Re: How did you learn your credit habits?

Anonymous — Fri, 03 Oct 2008 00:07:11 GMT

I learned my habits from my parents' examples. Basic points -

Always pay my bills on time.

Always save a little bit of my paycheck for a rainy day.

If I don't have the money, I don't buy it. (sort of, currently have a car loan & student loan)

Re: How did you learn your credit habits?

GFer — Fri, 03 Oct 2008 02:22:14 GMT

I learned good 'habits' from my parents...if you owe it---pay it---by whatever means.

Unfortunately neither one of them had credit...much. Other than houses---and I believe they did that only through co-signers by others. Can't prove this, as they are both deceased and I didn't really know (or care---mostly just was ignorant) about credit until several years later.

Most of what I've learned (other than very basics) was right here!

2 years ago my scores were in the 400's. I'll be pushing 700's 2009. Not the greatest scores, especially with my age and long credit history, but vast improvement!

I thank myFico and all members....profusely!

My family and friends think I'm a credit guru now....not by a long shot! LOL

But I feel extremely empowered and wealthy now...regardless of my pay!

Re: How did you learn your credit habits?

Anonymous — Fri, 03 Oct 2008 06:30:29 GMT

My parents were very financially conscientious. I was taught better, just chose to screw up. I finally decided enough is enough and took a refresher course online (including here). Have much work to do but much progress has been made, My head is right about it now. That's the important part.

Re: How did you learn your credit habits?

marty56 — Fri, 03 Oct 2008 11:23:45 GMT

By trial and error. Lots of errors. I didnt get my act togther until I wound up in DMP and loosing a relationship.

Re: How did you learn your credit habits?

athensguy — Fri, 03 Oct 2008 15:33:10 GMT

My parents were credit averse, so they actually were a negative factor in my credit habits. However they did have a good work ethic, so I learned to pay my bills. Fortunately it's much easier to recover from high balances than from defaults and late pays. I'm working on paying down the balances I've run up over the last 7 years and should be done soon.

I learned a lot of my technical information from this site and others like it.

Re: How did you learn your credit habits?

Anonymous — Fri, 03 Oct 2008 15:50:35 GMT

By the time I was 8, I was fearful of money. I learned from my mother how to fret and stress and cry and procrastinate and loathe over money, but I never learned what else to do with it --- except spend it. I'm pretty good at that.

I have made decent money for years. I have saved nothing. I couldn't even tell you where it went ... until recently. $5 here, $30 there, a $200 splurge ... a few times a week? That's where it went. I learned from my husband to plan my expenses and pay cash for as much as I can, as it is more painful to part with.

Everything about credit, I learned from this forum. I owe a debt of thanks. I love this place and everyone's help and genuine concern.

Thanks, everyone!

Re: How did you learn your credit habits?

Anonymous — Fri, 03 Oct 2008 17:20:27 GMT

I never really thought much about my credit until I graduated from college. I furnished my apartment by putting a few thousand dollars on a credit card. At that time I believed it was worth paying interest every month in order to have stuff I wanted/needed. I knew enough to pay more than the minimum every month, even if just a little but more, but after 2 years I still had such a high balance. I finally got tired or having to put so much of paycheck toward my credit card bill instead of being able to go out to dinner with friends or buying clothes! So I started paying as much as I could possibly afford toward my cc bill and in about 6 months it was paid off! I have (almost) never carried a balance on my cc ever since.

Message Edited by jules8769 on 10-03-2008 10:20 AM

Re: How did you learn your credit habits?

Anonymous — Fri, 03 Oct 2008 17:31:05 GMT

My first taste was from my first credit card. I saw quickly how you can get in trouble, so I gave up on them for a while.

Nobody ever really sat me down and explained. I've just done research over the years as it applied to my situation.

Re: How did you learn your credit habits?

Anonymous — Fri, 03 Oct 2008 19:27:48 GMT

My parents had lots of CCs when I was a wee little boy and watched them always PIF CC bills. That was my only exposure to debt. When I got a little older my parents taked to me about some things when I would ask. I leanred much more. It was only from what they taught me that I have what I did up to a few years ago. As of a few years ago I learned the rest on my own and got much further. But the big head start came from my exposure to credit watching my parents as a wee little boy.

I don't give them enough credit for who I am today.

Message Edited by ilovepizza on 10-03-2008 03:27 PM

Re: How did you learn your credit habits?

Anonymous — Sat, 04 Oct 2008 14:56:41 GMT

The first thing I ever learned about credit was from my mom

I learned that if my mom saw it and wanted it or thought she needed it she had a card for it in her wallet. She paid for everything with a credit card.

What I know now that she didn't explain to me then was she PIF for these purchases by mailing a check as soon as she got home.

This of course caused me to be into about $10,000 worth of credit card debt by the time I was 23!!!!

The next thing I learned about credit I learned from Dave Ramsey. He taught me all about settling my debts for less than the amount owed just to get the CCC's and CA's to leave me alone.

What I know now that I didn't know then was that while that got me out of debt and got the credit hounds off my back it wrecked my credit score and then I couldn't buy anything.

Everything that I know and do now I have learned from trial and error and actually taking the time to hear BOTH sides of all advice Im given and to always seek a second opinon and to do what I feel is best for me - not what was best for someone else because all financial situations are 100% unique!!

Re: How did you learn your credit habits?

ccdata — Sat, 04 Oct 2008 23:52:03 GMT

My parents didn't believe in credit cards (or paying for something "on time" as they called it) and paid for everything with cash and paid their bills on time every month. My sibliings and I were taught that if you wanted something that you saved for it (that is if it were worth having). Well when I finally went out on my own I did a pretty good job of sticking to my parents teachings until I applied for my first credit card and then well I only have myself to blame for the mess I made of my credit history.

But it is never too late to learn and get back on the right track and since I've been coming to this forum I've been learning a lot about how to go about what to do and what not to do as far as credit is concerned.

Re: How did you learn your credit habits?

haulingthescoreup — Sun, 05 Oct 2008 00:07:13 GMT

ccdata wrote:

My parents didn't believe in credit cards (or paying for something "on time" as they called it) ...

I think I remember from the old "Andy Capp in London" comic strip that they called buying on credit "putting it on the never-never."

Re: How did you learn your credit habits?

Anonymous — Sun, 05 Oct 2008 04:48:27 GMT

I started with great money handling before I came to the great US of A, then continue to do so until my family got bigger had 3 children and a husband that I had to leave. That was when everything went downhill, uphill for a very short period of time then downhill again. Now that my children are older and my business (which ate all my good credit) I am slowly managing my credit

1 year ago,

TU 520, EQ 515, EX505

NOW

TU 632, EQ 594, EX 592