My family has been through a lot in my lifetime. I spent all 18 years of my childhood in an impoverished household. My mother raised my two sisters and me by herself. She tried her hardest, even after her health deteriorated and she became disabled in 2012. You could say I grew up with a chip on my shoulder. I was determined to make it out of the cycle of poverty that I seemed destined for. I knew that building a strong credit profile was an integral part of that process. So I began building credit the day I turned 18 — it was one of the proudest days of my life.
Everything was going great for me. I had a line of good jobs; I was a full-time student; and I had a massive credit profile that I carefully monitored to make sure my balances stayed under 30-percent utilization.
But then, when school closed for the summer, I moved back home with my mom and sisters. That’s when things started to go downhill for my credit.
During the school year, I had been very fortunate to live on campus, where I always had a nice place to stay and a hot meal whenever I wanted it. When I came back home, I felt guilty. I began using my credit cards to buy things for the house that my family had needed for a long time. Things like clothes, shoes, pots, and pans — even groceries and the power bill. Things that many people would have taken for granted, but that they just didn’t have the extra money for while living off of my mom’s disability checks.
That was fine in my eyes. True, I was running my balances near 50-percent utilization, and it reflected in my credit score. However, I still had a way to pay my credit card bills. I had a steady, well-paying job and I wasn’t missing any payments. Everything would return to normal once I went back to school and didn’t have the extra expense of supporting my family.
The Effects of Poverty
Then life threw me the first of several curveballs that started a downward spiral for my credit: I failed the math class I had been retaking during the summer. I was about to start my sophomore year of college. This meant that I was nearly done with my general education requirements, and it was time to start work on the courses for my major. But it turned out that without that math class, I was stuck. I couldn’t register for any of the classes for my major without that course, and I had no backup plan. So I dropped out.
My Struggle to Find a Job
When my summer job ended in August, things went slowly downhill. I was jobless. I’d been applying and interviewing for positions that I thought I could easily get with my résumé and references. But nobody would hire me — not even Wendy’s or a Greyhound bus stop. I tried everywhere, but nobody wanted to hire a 19- to 20-year-old college dropout. The bills began coming. For a short while I was able to keep up by using what little I had in savings, working odd jobs, and selling things I didn’t need. I made at least the minimum payments on my credit cards pretty easily until winter rolled around. Then bills soared, and so did my balances on my cards.
In February 2017, life threw another curveball: My family was wrongly evicted from our home. Without a backup plan, savings, or any sort of safety net, we became homeless. I was lucky enough that my federal tax refund (which I’d planned on using to pay down my credit card balances) had arrived a few days before we were officially evicted. My family lived out of our car and hotel rooms for six weeks until my mom finally found a place with the help of some counselors and resources in our area. We moved in the first week of April that year.
If my credit wasn’t destroyed before, it sure was after that.
Between the time we were evicted and the time we moved into our new home, I maxed out every card I owned. That two-month period sealed my credit’s fate for the next few years, at least. It was too far gone. By August 2017, all of my credit card accounts except one had been closed and either charged off or sent to collections. I was a defeated man.
Rebuilding My Credit — and My Life
I was lucky enough to have had a group of friends and mentors who pushed me in the right direction; and I returned to school at Northern Kentucky University that same August. Since then, I’ve dedicated my time to educating people on how to establish, build, and maintain their credit, and how to manage their personal finances. I’ve just recently begun getting my life back on track. I spent my first few months back in Northern Kentucky recovering financially — getting my financial base re-established so that I would have a place to rebuild. I’ve only recently reopened my savings account and begun the process of credit repair by reaching out to creditors and collectors.
It’s been a long journey, and it’s going to take a lot of time and determination to get my credit back on track. Personal finance skills will be paramount in me doing that, and I’ll definitely be harnessing CentSai to make my journey easier.
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The opinions expressed in this article are those of the author alone and do not necessarily reflect the official policy or views of CentSai Inc.