Hi, long term reader, first time poster here - About a year and a half ago I had my normal 740-760 credit score. I used credit wisely as they say and really, most of the time didn't use much if any anyways. Didn't have a lot of money or anything but worked hard to, as they say, "keep my nose clean". (Came from having some credit issues back in my late teens/very early 20s, a couple of DECADES ago! )
Last winter/spring (the 2007 one that is), I used some of my credit for a few reasons. No big deal, no huge balances, zero missed or late payments. At the same time, one of my student loan companies began reporting my loans in differently. Instead of whatever they were labeled before (I think installment), they began reporting as revolving credit which they are and were not.
Okay, so I didn't even know anything about the above student loan things and went down to my car dealer to see what I was going to get when my then current lease ran out which was about 6 months away. I put in my app for a toyota matrix, leased again - low payments. My salesperson calls me back "What haappened???" I'm like uh what do you mean? And she told me my credit score was putting me in their "third tier" and was not at all eligible for the good lease rates anymore. Okay, I was shocked and even more so when I saw my score was at like 640. Now thats still not that bad but was not at all my normal. I thus found out the "whys" and it was the student loan reporting weirdly and that I'd used some credit - not a lot mind you and my ratio was probably at like 15% used, if that.
Well, late spring through late fall of 2007, I then did use a lot of my credit. It had to do with a family member and a close friend with serious health problems and their needs. I spent a lot of money. They both passed away in the fall of 2007, one month apart. I do not regret one penny spent.
I wasn't worried about the credit stuff though. I made my payments just fine right along and it hadn't come up until that fall when I tried to buy a different house. Oops, score is now 635. For no apparent reason other than using credit. Okay, well I had inquiries then for mortgage companies. Went to about I think it was 627. Hovered there for a long time....
Recently a huge snowball effect has started occurring. A few months back I got a letter from Lowes credit saying they had reduced my credit limit to 1800 from the 5000 it had always been. Like years and years and years. Now I'd never used but maybe $1000 to $2500 and would pay it/use it/pay it in no particular order. Never ever had a late or missed payment and always paid far more than minimum payments. Oh and incidently, at that time, guess what my balance was? $1825! Thus it put me OVER my new limit!
Not too long after that, I got a letter from USAA saying they had reduced my credit limits on my two cards with them, one mastercard and one AMEX card. Now these cards had each had a limit of $5000 for YEARS. I'd never used but maybe $200-$400 at any one time and that only to keep them open. My limit on each was now put at $1000 each.
Now okay, no big deal, right? Wrong. All this lowering the limits bit makes your ratio go haywire. Right there in the abovementioned three accounts, I LOST almost $11,000 of credit limits! Well, guess what happens next? Now companies start charging me utterly ABSURD interest rates! On balances I'd already accrued under the older stated interest rates! I went from in some cases, 12% interest rate to 31% interest rate! All without EVER doing anything wrong! NOTHING late, NOTHING missed, all payments larger than minimums!
Then I did get a late payment. Because WAMU bank had raised my interest rate and I didn't know it. I'd been sending them for a long time a certain amount as an automatic payment whether or not I used the card. Usually this was FAR FAR more than any minimums due. Well, with my new, exponentially higher, interest rate, my measley $100 was no good anymore. No, my payment that month was supposed to be like $275.
Now okay, maybe we are all supposed to peer over our accounts and reports all the time but I didnt do that because I kept track of what I used and knew what I was doing at any given time. Obviously the wrong move but you know what they say about hindsight.
Now, bear in mind though, this payment was NOT late by normal standards. No, not 30 days or anything. It was one week late. They closed down my card. Okay, once I talked with them(and paid the difference), it was reactivated BUT the damage was done with them. BAM, 31% interest rate. On an $8000 balance. Ow.
Well, being as they did this, my other creditors decided they needed to follow suit. BAM, Juniper gives me 31% interest. BAM, FIA gives me 28% interest (from like 4% for YEARS).
Now, just tonight, I was declined on my home depot card. Why? I was at my limit. My newly reduced haven't even had time to get the letter yet limit. There I went from a $5000 limit now down to a $2000 limit. Another $3000 in credit lost. And I've still not even been officially late for anyone. And I have a high utilized ratio I'm sure but I've seen far worse - Of course mine is only as high due to all the credit LOSSES I've been getting lately. It is currently at about 70-75% utilized BUT if I had what I started out with, it was more like 50%.
Now, the other problem is now I've been using more credit. Why? Because now with doubled and tripled payments, I keep running out of money. I mean like this is very NOT good. I could EASILY make my normal payments that I'd figured on - and still have my emergency fund on cards. Now I have no emergency fund and the total of these payments.... well, lets just say I'm glad its not winter because I let my gas get shut off last month.
With everything I've been going through now to try to frantically preserve my credit, guess what? My most recent score is 580. I am trailer park trash. At least in the eyes of any potential creditor that is. I mean like talk about falling downhill without a paddle! Without even trying AND without even messing anything up! (BTW, No issues with trailer parks, its a figure of speech. My father lived in a mobile home and it was very nice. Hope that didnt offend anyone, I sure dont mean to!) I couldn't get credit right now no matter whose life depended on it. I am almost tempted to look into bankruptcy.
Instead, I've decided to refinance my house. I really don't want to. The only company that would take me is uh yeah, that one. It also involves adding my separated husband onto my title and mortgage so as to use his income for the debt to income ratio. Now thats not so much any kind of trust issue, we are friends and all that, but its just so wrong. Its not his and he doesn't live there but we have to now say he does. But I have a bunch of equity and I suppose it beats trying to sell for lower money these days. I'm really not sure I'm doing the right thing at all but I don't see any other reasonable and quick way out of this before I end up really being late on EVERYTHING and thus blowing it all like forever. I do almost wonder if bankruptcy would be better but no, that is just so wrong too. I haven't DONE anything and shouldn't have to have bankruptcy. But I wonder if a 580 score isn't like already there scorewise!
Anyways, just sharing for the most part but all thoughts very welcome! Maybe someone knows something I don't know that would be helpful! Thanks for reading all this!
