A Personal Look at Credit Solutions
A Personal Look at Credit Solutions
Everything I learned the hard way about my credit, I could have easily learned from my dog Sadie. I know that sounds strange, but it really all comes down to one word - patience. Sadie has more patience than anyone I know, and I sure wish I'd followed her example early on.
A few months into my first job after college, I wanted to buy a home. I'd always paid my rent on time, so I thought qualifying for a mortgage would be no problem. I was astounded, after consulting a loan officer, to learn that I had almost no credit. I didn't have bad credit, just very little credit at all.
The solution, the loan officer said, was to open a credit card, use it and make timely payments. I realized immediately that what he was talking about could take months, two or three at the very least, before I would see any improvement to my credit score, but there seemed nothing else to do. So, I followed his advice.
When I thought about how long I was waiting for this credit solution, I would just shake my head. I was working fairly long hours to make my way at my job. Sadie never seemed to mind waiting through those hours for me to come home, but that didn't occur to me.
Four months later, I did qualify for my mortgage. The loan officer's solution for building up my credit had worked. I was becoming used to using credit cards, a little too used to them in fact.
It didn't take long for me to get in over my head in debt. When I checked my credit report towards the end of the next year, I found my score way down, partially due to the high percentage of my credit limit I was
using and partially due to a few late payments.
A friend mentioned a credit negotiation service that claimed to be able to fix credit quickly and settle with the credit card company for much less than I owed. It sounded appealing, and I didn't mind paying them up front for their services if they could deliver.
That was around the same time that I started taking Sadie to a doggy day care, so that she could spend more time around people and other dogs while I was working. I got very positive reports on her behavior. Apparently, she was interacting well with the other dogs. The daycare worker even told me she was the smartest when it came to waiting for the doggy treats she liked best. She was brighter than some of the others who would run to the front of the pack when just any treat was offered.
I wasn't learning as fast as Sadie. While I'd been paying the credit negotiation service fees for months, they'd made no headway with my credit card company on lowering my debt. In fact, my balance was higher than ever before since the negotiation service had advised me to stop paying my bill while they negotiated.
My credit score, on the other hand, was lower than ever since I now had several more late payments posted to my account.
I don't remember when I finally wised up, but I took my bills to a credit counseling service, and they came up with the credit solution I needed. They advised me to stop using my card and helped me formulate a plan to pay back my debt. It wouldn't be quick. It would take many months for my credit score to recover and several years to pay down my balance, but it was guaranteed to work if I stuck to it.
About a year later, I took another step toward the solution to my credit problems by taking out a home equity loan and significantly paying down my credit card balance. While I would still owe the money on the equity loan, I would be paying a much lower interest rate on the second mortgage, and all the interest I paid would be tax deductible.
Through all the years, Sadie always gave me that patient look dogs give you. She could have just been wondering when I was going to take her to the park, but I like to think she was also wondering when I would learn the same patience she already knew.