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!
* My experiences (54%)
* Research (online/books) (29%)
* Family member (17%)
* School/University (0%)
Total votes: 52
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.
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.
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!
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.
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.
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)
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!