Ahhhh! Credit! Can't live with it! Can't live without it!
What is credit?
Credit is defined as: (noun) the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.
Why do we need credit?
Having good credit can help you out in various areas of your life. If you're a renter, it can help get you into a swanky new apartment you wouldn't have been able to if you have a bad credit score. Good credit also helps you buy more expensive items, without having to pay cash up front. It can also affect the kind of job you get. In more recent years, employers have been doing credit checks before extending employment. Needless to say, good credit goes a long way to having the finer things in life.
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My Credit Story
In October 2014, I filed for bankruptcy. I did a buttload of research before filing. I also looked at the benefits and consequences of filing. Most say that bankruptcy will ruin your credit, but in fact my credit score jumped over 100 points, once the negative items on my report were removed or listed as included in bankruptcy. It is true that the bankruptcy label stays on your report for 7 years and that can be looked upon negatively, but one bad mark versus the several bad marks that will be erased seemed like a good trade off to me. Another con of filing bankruptcy is you can lose property. Myself, being a renter and upside down in a car loan, didn't have any property to lose in bankruptcy.
In my case, I felt my best option was to file. My wages were being garnished for a lawsuit that was filed against me in 2007. I had no idea I was ever sued and owed the debt. The certified letter was sent to an address I no longer lived at and the front desk person signed for it without checking to see if I lived there. I was upside down in a car loan, that had I paid it off completely, I would've paid about 6x what my actual car was worth. The car was falling apart not even a year after I bought it and my warranty was up. I had racked up a ton of debt including medical bills and other bills I just didn't pay. I lived in an apartment that wasn't very safe. It was in a bad neighborhood. I couldn't get out of it because I had an eviction on my record that I hadn't paid. I was an irresponsible young adult.
I looked at filing bankruptcy as a fresh start to better credit and a better life. And in fact, it was.
It's been a year since my bankruptcy was discharged. Since the discharge, I've been able to obtain credit, buy a new car (a car worth what I'm paying for it), and move into a nice apartment complex. I've also been able to obtain a few credit cards with decent credit limits that I can use to build my credit. My score is in the mid 600's currently and growing every day.
My main source of information on bankruptcy and credit building is the MyFico.com forums.
If you have any questions about my journey, leave a comment.
--------------------------------------------------------------------------------------------------------------------------
My Credit Story
In October 2014, I filed for bankruptcy. I did a buttload of research before filing. I also looked at the benefits and consequences of filing. Most say that bankruptcy will ruin your credit, but in fact my credit score jumped over 100 points, once the negative items on my report were removed or listed as included in bankruptcy. It is true that the bankruptcy label stays on your report for 7 years and that can be looked upon negatively, but one bad mark versus the several bad marks that will be erased seemed like a good trade off to me. Another con of filing bankruptcy is you can lose property. Myself, being a renter and upside down in a car loan, didn't have any property to lose in bankruptcy.
In my case, I felt my best option was to file. My wages were being garnished for a lawsuit that was filed against me in 2007. I had no idea I was ever sued and owed the debt. The certified letter was sent to an address I no longer lived at and the front desk person signed for it without checking to see if I lived there. I was upside down in a car loan, that had I paid it off completely, I would've paid about 6x what my actual car was worth. The car was falling apart not even a year after I bought it and my warranty was up. I had racked up a ton of debt including medical bills and other bills I just didn't pay. I lived in an apartment that wasn't very safe. It was in a bad neighborhood. I couldn't get out of it because I had an eviction on my record that I hadn't paid. I was an irresponsible young adult.
I looked at filing bankruptcy as a fresh start to better credit and a better life. And in fact, it was.
It's been a year since my bankruptcy was discharged. Since the discharge, I've been able to obtain credit, buy a new car (a car worth what I'm paying for it), and move into a nice apartment complex. I've also been able to obtain a few credit cards with decent credit limits that I can use to build my credit. My score is in the mid 600's currently and growing every day.
My main source of information on bankruptcy and credit building is the MyFico.com forums.
If you have any questions about my journey, leave a comment.
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