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Recently, my personal credit card from Bank of America was switched from a secured credit card to an unsecured card and the limit raised to $1500.  Now I know there is no way in a single blog post to cover everything there is to know about credit but at the very least I wanted to give some insight into my experiences to date.

Let me be clear, when we initially took over the gym my credit score was sub-600.  Which is odd (sort of) because I’m frugal.  I’ve been accused of being financially stingy. I prefer describing it as living simple, living within my means.  So why was my credit so low?

  • Unpaid parking tickets (a few ~ $300)
  • An unpaid medical bill from 4 years previous (~$100)
  • Missed/late student loan payments from a 1.5-2 year period of being unemployed following my layoff from my first job (currently current)
  • Missed/late Kay Jewelry payments for my lovely wife’s wedding band – again – from the period of being unemployed (currently current)

Mind you these dings were in the amounts of a few hundred dollars but to the credit agencies they might as well have been bankruptcies.

At no point did I apologize for my credit history to anyone.  Since graduating I’ve had to address the issue of credit with student loan collectors, underwriters/loan officers for business loans, tellers when applying for credit cards, phone operators trying to setup a merchant account for credit card processing for my business, even setting up the internet at our business. More often than not they tried to make me feel guilty or inferior.  Calling all hours of the day, every day.  Their general tone or condescending attitude. Wells Fargo loan officers and underwriters required written explanations on every month for every late payment on every account.

I consider my credit recovery starting about 2 years ago in 2011 when the gym was stable enough to start reliably paying my bills on a consistent and regular basis.   Since that time my goals have been 2: make on-time monthly payments, work off a cash basis.  I did open a secured credit card with $800 down from Bank of America.  However, there was a secret motivation here.  In order to build credit, you need to use credit.  The purpose of the card was and is to this day solely used to pay for my wife’s travel expenses which are reimbursed by her company.  She puts the flight on the card, the company pays her back, she pays off the card.

In fact, my wife’s credit is worse than mine.  We couldn’t open the card together.  She was added as an “authorized user.”  The benefit here is that she is building her credit the more she uses and pays off the secured card even if she couldn’t open up a card herself.

Credit can be embarrassing, it can be intimidating. But do not let it hold you back: co-signers, higher down payment, collateral, authorized user on an existing credit card, negotiating payment structure, settling, late fee forgiveness.  There is a solution to what you want to do and where you want to go.  Do not let embarrassment or intimidation prevent you from moving forward.

Here’s the catch.  Credit is important.  Especially important if you’re trying to get a business loan, a credit card, some kind of funding.  In the real world, it’s important if you’re trying to get a car or a house.  You need to understand credit and know your credit score.

My second point is that credit cannot be solved over night. For us type A’s that like an answer or a fix right away, on the spot, that’s not how credit works.  I’ve tried credit repair, I’ve tried paying off all debts, I’ve tried opening new cards.  The only real solution is time.

When you realize that it makes it easier to emotionally move forward and intellectually start planning for the future.

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