[UPDATE: As of April 17, 2016 – my credit score is now 697. Go, me!]
And, by the way – my current credit score is an improvement. Two years ago, I was carrying around a total of 565 points. So, what happened? Well, long story short – I was young and stupid.
Short story, long – after looking for a job for months and finally accepting a gig that paid less than $10,000 a year, I found myself completely unable to repay my student loans. Plus, I maxed out my credit card’s limit of $5,000.
Life was horrible. Credit collectors were calling me at all hours of the night and Citibank kept sending me letters saying they didn’t just want part of the money, but they wanted all of the money and NOW.
Rather than talking to my creditors and letting them know my situation, I did what any other stupid 23 year-old would do – I hid. I dodged phone calls and stashed collection letters in a shoebox under my bed. I was so ashamed that I lied to my parents and told them everything was okay. But, it wasn’t. I was drowning in a sea of debt.
Finally, after landing my first full-time job, I decided it was time to pay my bills.
Surprisingly, it was pretty easy to settle my student loans once I spelled out the situation. Both creditors let me push back the due date so I could start payments when I was financial ready (within reason, of course).
As for my credit card, I researched debt management programs online. Now, I know some of you fancy schmancy financial folk aren’t fans of DMPs (as they leave a mark on your credit history), but I was in no way able to negotiate a settlement with Citibank on my own – I was flat out broke.
Today, my DMP takes care of my credit card payments with an auto-payment of just $139.32 per month. After two years, my balance reduced from $5,125 to $2,765. Pretty good, I think.
So, yes – my credit is in bad shape but it doesn’t bug me. I’ve never had a problem finding a job or even getting my own studio apartment by the beach (which I let go real quick once I got serious about saving money).
I’m confident that – with my newly found good habits – my credit score is steadily on the road to recovery.