I just want to put something out there that happened to me over the years. I hope there are young people who will read this and not make the mistakes I made. I've wanted to tell my story since I found myFICO and let everyone know that even when it seems bleak, something could happen to you and you'll be given a second chance like I'm blessed to have happened recently. Here's my life story pertaining to credit (sorry I'm so long winded, you should hear me in person!):
My first credit card at age 18 was a Sears card and a $500 CL - it was about half the size of a normal CC. I remember my parents saying to buy small things on it and pay it off right away. I did that, and eventually I was able to get better cards. Credit was never a problem for me during my early adult life as I was making great money, and any time I needed credit for anything, whether a car loan or going into a bank for a PLOC, I never had to worry about rejection. I have absolutely no idea what my credit score would have been because I never considered checking them out. One car dealership I went to when living in San Jose in 1998 told me I was a "credit stud". I laughed but kept that thought in my mind any time I sought out credit, whether a cc or loan.
My goal was to never be in debt (except for car payments and either rent or mortgage). When I got divorced in 1995 I incurred some debt and had total CC debt of about $4,000. When I moved from PA to CA as recently divorced guy in 1996, I was sickened by the fact I needed to consolidate and pay that debt off. I went into a Wells Fargo bank and paid off that $4k in 2 years. Felt good. Then I remarried in 1998, we started looking at houses, but never bought one in San Jose and we both decided it was time to move back to the east coast (she was from PA also but out there in CA for 20 years). My job transferred me to Pittsburgh, PA in 1999, still making really good money based on the cost of living in CA. We bought a house and were very comfortable where we were at financially. Finally I could start saving for retirement.....or so I thought.
I went into work one day in April, 2001, and was immediately ushered into a conference room along with the rest of my co-workers from my department and there were severance packages sitting in front of us. WHAT....23 years of service, moving across country for them and back, and they have the nerve to downsize our company and dump me too? I had always thought I'd have this job until I retire, but being in the printing industry was eventually doomed by the internet and less need for paper documents, and I can thank it for losing my job. I got 46 weeks of full severance pay and full COBRA for a year. I also qualified for unemployment, which at first, I was totally against - it just wasn't my style. But, I came to my common senses when my wife reminded me I paid into it all those years, now it's my turn to use it. When I graduated from high school in 1978, there was no big deal about going to college, certainly not the impact it has now. So, I went right into the workforce with this printing company and joined the U.S. Marines in 1981 and did my active duty for boot camp and my school, and served in the Reserves until 1987. Now, I'm faced with an oh crap, I only know printing, I have no other job skills, and the 6 years in artillery in the Marines wasn't going to help the resume. So, I remembered thinking back in 2000 when we bought our home in Pittsburgh how awesome it would be some day to consider getting my real estate license because of the "fun" it must be to be a realtor when you're a people person while buying our house. So, I went to real estate school, took my exams and found a large real estate company in Pittsburgh that took me on. So, you're an independent contractor and not employed by the real estate company, and you're on your own for leads and building relationships. I did front desk duty as often as I could in case of a "walk in". I also did open houses for other agents who had multiple listings. This was 2001....I was just starting to find my groove and feel comfortable in my new career when 9-11-01 happened. The economy took a horrible turn and the real estate market tanked. I had some moderate success, a couple of listings, and was doing an open house for a realtor friend in December 2001 - and the wife of a Steelers player came to the open house and wanted to buy it. So, I was like the star realtor because everyone at the real estate office bent backwards to make the deal happen, especially when it was a high profile football player. I'd rather not mention the name, but they were the most wonderful couple with young kids and devout Christians. I also got to go to several games that year!
Anyway, I knew that I needed to switch careers, and I spent a lot of time talking with the in-house auto/home insurance rep. I decided that was a much better suited move for me, so I studied and passed those exams. I was hired as a captive agent and ran my own office for the next 5 years. My paychecks were a fraction of what I was making when I was let go in 2001 and I had $400/month child support payments. I decided I would not fight for a lower support payment, and I was using those credit card checks some months and sending them to my ex-wife. Yea, big mistake. And, with having my own office meant lots of other expenses, which went on my cards. By 2006 I was up to my eyeballs in CC debt (will give those numbers later). I had a really nice book of business built up and consistently led in new business montly for my company and a great loss ratio. However, I was putting all my income back into the business and had little left over to pay my credit cards and other expenses.
So, in 2007, I completely closed my insurance office and changed careers (kept my license active), and did customer service for Verizon. I was still on the phone talking with people all day, but I sure was missing sales. I stuck that out for just over 2 years and was a senior rep with decent pay and good hours. However, my wife and I decided it was time to move across state from Pittsburgh to the eastern part where we grew up and be close to our families. For her it was her Mom who was recently widowed, and for me my daughter who was about to get married. Our son, who was in 9th grade was MAD that we were moving from the only school district he ever knew and had to make new friends going into 10th grade. Within 10 minutes of being on Monster.com I actually found job that was PERFECT - insurance license required, and customer service skills. I was interviewed and hired in April 2009. We were confident our house was going to sell with no problem in Pittsburgh, so we bought a house here in EPA and guess what....yup, we carried 2 mortgages for a year. That was another financial kick in the pants.Thankfully my wife was also former military so we got a VA loan with her excellent credit (mine is the one that suffered and I never asked her for help).
So, I diligently paid the minimum due each month on my debt. I had also purchased a motorcycle and it was financed too. That just made things worse, but I was in such a financial hole, I was almost at the point where I just figured I'd die broke and work the rest of my life and never consider retirement. I'd occasionally considered bankruptcy but thought better of it and figured one day things would get better.
I recently found an old Excel file that I used monthly to track my bills. Below I listed the bills, in addition to some other household monthly bills. I'm just listing the credit and motorcycle debt:
Capital One Platinum Visa: $16,600 debt / $400 min/month payment
AMEX Costco: $13,600 debt / $255 min/month payment
Chase VISA: $9,000 / Closed it in 2010, it was once maxed but down to $4,400 balance /$120 min payment
HSBC/CapOne Motorcycle loan: Originally $13,000 - down to $7,600 / $210 min/month pmt
Wels Fargo car loan: $300 per month.
I was simply paying the minimum due each month and then had to use the principal to pay other bills, so they always were maxed out each month. That was a total of just about $1,300 per month in debt I was paying and not getting ahead. Very little of the AMEX and Capital One payments actually went to principal and only the Chase card was actually going down since I couldn't use the available principal to pay other things.
As I mentioned before, one day I decided I'd die in debt....well, I got notified last July that something could happen that will change my life around and finally kick debt out of my life forever. God is in control of my life, even though outwardly I don't always show it. The notification was very unexpected, and I didn't really have knowledge of - that for the 23 years I worked for that printing company, I was a "vested" employee - meaning when I retired I was going to get a pension from them....but they were offering me a one time lump sum payment that I could reinvest in a 401(k) or take the penalty and do with it what I wanted to. Did a lot of talking with my wife about it, did a lot of research, crunched the numbers, and decided that I had a second chance that I never saw coming. I ended up taking the check, that arrived in November, 2014 - they took off the 20% penalty off the top for me, and I figured out how much I needed for state and federal taxes and went to town. All those bills mentioned above, on November 12 were getting paid!! Oh what a great feeling to see in one day owing over $42,000 to owing NOTHING to them anymore. Thank you God!
I vowed that I will NEVER be foolish with my credit again. I started reading the Dave Ramsey story and I closed all my cards except for the Capital One card, and I called them and asked to decrease my CL to $8k from the $16,600 I had before. That included a Kohl's card, Home Depot and Lowe's card too. All my bills were going to be paid on my debit card as soon as the bill generates was the goal. I then noticed after I had a $0 balance on my remaining CapOne card that I could view their version of my FICO score. It was 723 (I know now that wasn't a true FICO). I started getting interested in looking at my credit reports for the first time ever and also seeing my scores. I really wish I'd have looked over the years at what my FICO was, but I bet it was in the low 600 range, but I don't know for sure.
Then I started thinking, is it really that good to have $0 debt and only $8k in case of a rainy day. I started researching the best low interest cards and started applying. First card that I thought I'd try to get was a CC with my PSECU bank - boom $9k at 9.9% APR. Same night I tried and got the Discover card (I always wanted one but never tried)....boom 9.9% APR and $9,500 CL. A couple of weeks later I got the Barclay Ring with 8% APR.
So, I thought, this is good in case of a rainy day. I started researching online for ways to raise my FICO score and also started reading about rewards cards. I then applied for a CITI Double Cash and USAA cards and approved with nice CL. Those cards arrived and I got nervous. I called the banks and said I wasn't going to activate them and ripped them up. I just don't want to ever be in CC debt again.
So, eventually I then decided I'm disciplined enough to get other rewards cards in April and use them to my advantage, pay them in full and reap the rewards. So I apped and got Quicksilver, Chase Freedom, US Bank Cash+, AMEX Blue Cash, BJ's Perks MC, PayPal Extras MC, Home Depot, Lowes and a Sheetz card from First National Bank of Omaha. The Sheetz card was the big eye opener for me....they were NOT going to give it to me and recons to no avail.....I just had too many recent inquiries, even though my FICO score numbers are in the high 700s and even hanging around 800. Lowes just flat out rejected me. They told me I closed a Lowes card within the past 12 months and thanks but no thanks.
That's when I finally found myFICO. You guys have changed my life. Things I was doing on my own were pretty much what is taught here. I have successfully made purchases and immediately paid them off. I have a complicated Excel spreadsheet for all my bills, the CC that I will use for the best points/rewards and pay them in full. This just started a month ago. Two weeks ago I had $20 in my wallet, and still have $16 left. My online banking withdrawals are all for paying on the rewards cards, and I've already got my $100 bonus with the Chase Freedom. I'm close on the AMEX Blue Cash Everyday and almost there with Quicksilver. Those bonuses will be achieved in the next month.
I am fanatical about personal finances now, I'm monitoring my FICO scores and alerts, I keep track of the score trends and am determined to have no more than 1% to 2% reported each month. I'm reading that you should only have one card report, so that's my goal starting in June. I also want to dedicate myself to helping others and do what I can to help this awesome community on myFICO. I hope I haven't bored you all to death. I just want you to know that I now believe in second chances in life and this is my story.
P.S. - I almost just had a heart attack. I tried to post and got some sort of "authentication failed" error and thought I lost all this!! Whew, was able to get it when I hit the back on my Chrome browser!
