Hanging out on these forums and recently listening to some Dave Ramsey episodes has really gotten me thinking about my past relationship wtih credit and spending and all the mistakes that I made in the past. I am not perfect now, and I certainly am not as conservative with spending as Dave Ramsey preaches on his show but I often scratch my head wondering why I allowed myself to be so stupid in the past. This post is intended for those who maybe have gone through the rebuilding process more than once to know there is hope.
In 2008, while in college, working two jobs (one part time, and one full time) I made what I will forever consider a pretty big mistake I moved out on my own. I started racking up credit card debt pretty fast, I had an AMEX, a Wal-Mart GE Money Bank Card, a GE Money bank Chevron gas card, and had the Apple Rewards BarclayCard which I used to buy a laptop with. Needless to say, I bought a bunch of stuff for my new apartment (TV, bed, desk, shelves, kitchen supplies, etc) charged it all on the cards. At some point my spending far exceeded my income and I kept saying to myself "when I finish college I will make more money and can pay this stuff off".
I finished college, I got another job but it didn't pay a ton more than I was making working two jobs and accounts started getting closed as I had too many late payments and too high utilization but my spending didn't really stop, charge offs happened and thus entering a state of bad debt. I "ran" from debt collectors for a long time, I don't know what I was thinking or planning to do, I wasn't ready to man up and own up to the fact that I owed this money (I was 21 in 2009, some 21 year olds aren't that mature). In 2010 some life changing stuff happened, I was laid off and my dad died over the course of a couple of months. I ended up really lucky landing a job paying twice my previous salary, getting to move to Austin and landed a pretty cheap roommate situation, but again, early 20's money went to going out and toys. Still dodging collections. I went about this for a couple years, I guess still not sure what I was thinking.
In 2012 I started my first "rebuild" journey, at this point I was now making 3 times what I was making in 2008, I was still spending heavily and had taken out new loans to furnish a rental house. I got a secured credit card which I always paid at least the minimum on time, but I was still living beyond my means. My main focus was the rent check getting paid. I started setting up payment plans with the collection agencies, but I did a terrible job keeping up with which collections agency was for what account so I had money coming out of my account each month but absolutely no budget.
Two years later, most of my collections were paid off, but now I had two Capital One cards, and still was living beyond my means. It almost bordered insanity when I consider my salary had kept rising but my spending was rising too. I will admit a lot of money in booze and strip clubs. I am sure in restrospect my behaviors would be considered compulsive, most money going in was going out and I continued to rack up credit card debt (cash advances and ATM fees at the club). Writing this down I am disgusted with myself.
Finally in late 2015, I had met my now wife who did not like the idea of me going to strip clubs so I stopped cold turkey, in November 2015 I took out a pretty high interest 8K loan from Lending Club and paid all the credit card debt. I recieved a very significant raise that same year, it was a huge blessing. I have no idea what my real scores were, but I didn't know about Goodwill letters or PFD and all the great information that people can get on these forums so I know there were still baddies on my reports, they were all $0 balance but the late and charge offs were there. I was only on CK though.
I hit what I hope will be known as my personal bottom, I was extremely grateful to meet my wife who honestly, and all my friends will say the same thing, really made me into a better person. In a way it saddens me that I needed her to become a better person, because I should have been capable of doing it on my own. I am very lucky to work in a booming industry and having grown with my company. I have no idea what lightbulb went off but the Lending Club loan allowed me to have 0 credit card debt which I think once I got to that point allowed me to see that I didn't want to rack it up.
The loan was like 30% interest, in retrospect I might have shopped around. I made 23 payments on the loan before I did BT of the remainig balance to my CapitalOne QuickSilver on a 0% APR offer and paid off the remaining year on the loan that way. That was scary to me, putting that amount on a credit card again but I felt I learned my lesson.
I recently took care of the last negative on my Equifax report and that score should be looking better soon. It is a new world for me, and the last 5 years of showing responsible use of credit. My savings has grown, and now finally preparing to become a homeowner, something that 5 years ago I felt would NEVER happen.
I joined here in 2016, a year into my final and real rebuild and learned now to maximize the benefits I was getting by improving my credit.
In the end, for everyone who has a story, just know there is hope. There are always outside factors some within our control and some outside of our control, but there is always hope and if you follow the advice of the people here you will go a long way. -- I hope this helps someone.
Thank you for sharing your story. Congratulations on your success! Good luck on your continued credit journey.
Great job on all your hard work and thanks for sharing your story!
@Anonymous wrote:That's a heck of a roller coaster ride but I'm glad you were able to work it out, stabilize the impulses and settle into adulthood. Life is a lot better now I'm sure, and the victory is that much sweeter knowing you did it with your own effort. Congrats!
It really is hard to believe it has only been five years as it feels like forever ago, the last several years have been great, it isn't financial freedom and we are planning to add a mortgage before the year is over but yes growing up and becoming less impulsive with spend really has made things overall better.
One thing I aboslutely encourage people now, don't decieve yourself.
Congrats! Thanks for sharing. Glad all worked out well, and I'm sure your story will inspire others.
