Tuesday, October 19, 2010

A Costly Truth

If you've been surfing around the blog world, you've seen the "30 Days of Truth" that's going around. I think it could be a very introspective and fun project, so here goes

Day 01: Something You Hate About Yourself

I hate that when I was younger, I was financially irresponsible. Like very irresponsible. I was one of the kids who went to college, was mailed my very first credit card, and things went down hill from there for the next 5 years. I racked up quite a bit of debt in a short period of time. It's not that my parents didn't warn me about credit cards, but I don't think they didn't realized what I was doing or the extent of it. When I had to come clean, I was bailed out, then did it again. It was embarrassing and stressful when creditors started calling.

Right before the end, I owed $1,200 in 10 days on two cards. I didn't know what to do. I turned to one of those credit counselors you see on TV. In hindsight, big mistake. But it I got on track. I settled my debts with the credit card companies, and faithfully made my monthly payment to the consolidator. I even paid it off a year and a half early.

Unfortunately, my past continues to follow me. The delinquent accounts are still on my credit report, still affecting my scores, and may inhibit me from buying the house we want. Even though I've been nothing but responsible for the last five years - I have to be, I have nothing but my paycheck to live off of - I am still paying for my mistakes as a 20-year-old. I've worked hard to build a safety net so that I don't have to fear something going wrong. Five years after my consolidation and with not a single new derogatory item on my report, I still can't get a major credit card company to have faith in me. It's a vicious cycle: I can't raise my score because I don't have the confidence of a major creditor, but I can't obtain credit without a higher score.

It affects how I see myself and how others see me. Not just potential creditors, but I feel like I get the side-eye when I buy something I've saved hard for and have budgeted for. I feel like I'm always under the microscope, and my purchases and expenditures are being tallied. In reality, I have a healthy amount of savings, an account I contribute 10% of my income to every month (not to mention my 401K contribution), and my husband and I live comfortably. We're clothed, fed, healthy, and happy.

I just wish I could tell my younger self to slow down, that the mistakes made will continue to have an impact for at least the next 10 years. I think it would be awesome to someday help young people obtain and keep healthy credit and not make my mistakes. I wish I could wash away this skeleton in my closet.


Shana said...

Amen sister. I did the same thing...used credit unwisely and then got bailed out only to screw up again...and then again. Yup...three times. And I had tax debt on top of everything else...that's right...the CPA owed money to the IRS. Stupid, right?

Luckily, I had J to help me out of my hole and got me on a budget. I also managed to get a credit card, which was a huge help. But it took 7 years for my credit to really get sorted and really...it's still got a long way to go to be "good" again.

Good luck. It's a tough road, but you are doing great.

BrownEyedGirlsMom said...

Hopefully you can use your experiences to help others not make the same mistakes you made!