I was 21 years old and in love. I had recently met a beautiful young woman at an INROADS leadership conference in Grand Rapids, Michigan and I was a year away from graduating with a finance degree and no student loans. She asked me a question that changed my life. "What is your credit score?" I thought, what is a credit score?
Little did I know, that there were 2 unpaid bills in my name that I didn't sign up for, and 3 unpaid hospitable bills due to an insurance lapse I didn't know about. Here's what I did to fix my credit score. (Spoiler Alert: that young lady is now my wife of 12 years!)
1. Contacted All the Companies I Owed
I owed the hospital, a doctor's office, the cable company, and the electric company. Why do I say I owed them even though I didn't sign up for the services and I thought insurance covered the hospital visit? Because I was responsible for my own credit. The electric company said I needed to file a police report if there was identity theft. I did not do that because I didn't want to hurt a family member. So I asked if they would accept a lower amount if I paid it that day. They said yes! I did the same thing with the hospital and created a two-part payment plan.
2. Signed up for a Secured Credit Card
At the time U.S. Bank offered a secured credit card, where you put money in a savings account equal to the amount of the credit card limit. If you don't pay off the credit card then the money from the savings account covers it. With my credit score this was the only way I could build credit. I started with $250 and after 2 years my credit score improved 200+ points (it was pretty low). After 3 years I was able to increase the limit and receive a check for my savings balance.
3. Moved in With Family
After I graduated from BGSU, engaged and ready for life, I had to move in with my aunt and uncle to save money and focus on rebuilding my credit score. This was beneficial to me for more reasons than one. I also learned from their 30+ year marriage. While I lived there I paid rent, read several books, and began planning my financial future.
As as a result of these decisions, my wife and I were able to buy our first home at 24 and I was finally able to buy a car in my name at 28. Today my credit score is 400 points higher than it was nearly 15 years ago.
- Vontoba Terry
Resources: AnnualCreditReport.com (free)