Like many others, I made some mistakes when I was just out of high school and succumbed to predatory lenders who felt it was ok to extend large credit lines to young adults. I was blessed enough to have parents who were able to get me out of the hole I dug myself into, but they could not fix my credit history. This issue coupled with medical bills that I could not pay dropped my score into the mid-500 range. After I got myself out of debt, I focused on paying the bills that I did owe was a great feeling. Fast forward several years, my score is now 765 and I am in the process of searching for a home. I only have three open accounts and I try to keep my debt utilization at around 9% for one card, all the other cards carry a zero balance before the statement is closed. Credit card companies only report to the agencies when your statement closes, so I do use all three but pay off the other two before the statement is cut. I only take credit line increases on my rewards card and decline all others.
This bank is open and honest about the high APR and the fees but has a lack of customer service and the clear gouging of people who are trying to fix their lives. Remember this is a business and they are dealing with high risk applicants and they need to protect themselves. Lots of these forums are filled with horror stories, but in reality it boils down to personal responsibility. If you are late on a payment regardless of how many times you are on time, there are still consequences to your actions.
Some things to remember:
- Never wait until your due date to pay your bill. I always paid two weeks in advance.
- Pay more than your monthly payment. Unfortunately, predatory credit card companies try to keep you in debt. Monthly interest payments are the one of the only ways that credit card companies can make money. It is understandable that at times all you can afford is the minimum amount, but if this is your strategy you will only being paying on the interest, and you’ll never reduce your balance. Think of it this way: if you utilize half of your balance (350) and make minimum monthly payments it will take you around 20 months to pay down the debt. You will incur almost 250.00 in interest.
- Use this card for things such as gas, groceries, utilities. and pay the balance within a week.
There are many things that I wish I knew about the credit industry, but I can’t turn back the hand of times. We are all going to have things happen that are out of our control and we WILL make mistakes. It’s the lessons that you learn from those mistakes that shape your character and build your creditworthiness.
Good luck in your credit rebuilding and maintaining!
-N
Thank you!
It is a great feeling to be basically debt free!
You are welcome!
Credit is a touchy subject and it takes a lot of self study to begin to scratch the surface.
I hope I could bless someone today!