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We Want to Help and Educate

At Freedom Credit Union, we love our members and love serving them. We also want to help educate on financial matters to assist members in their everyday lives. The articles we share are aimed at providing information, suggestions, helps, and assistance. We also welcome your input on future article topics you may want to see.

Repairing My Credit

Apr 14, 2022, 19:43 PM by Ryan Ashby


In my mid-twenties I had a goal of purchasing a condo but was unable to qualify for the loans I needed mostly due to my tremendous amount of credit card debt. When I finally got to a point that I was tired of tracking every dollar of debt and juggling card balances, I contacted a credit counselor. Before I go into the details of that conversation, let's review my background. As a child of divorced parents, I focused on the bright side of the situation and enjoyed the best of both worlds. Dad wanted to make up for the time we weren't together and showered me with gifts, clothes, and foods that Mom wouldn't allow. Mom, on the other hand, was very practical with finances but made life fun and interesting with a lot of quality time together. As I got older, I adopted what I believed to be my dad's philosophy on spending, that "you only live once". Clothes, vacations, gear for all my new outdoor interests were well outside what should have been my budget, paid for on credit.

When credit card companies offered new cards with any number of months of no interest on balance transfers, I quickly applied in the hopes of reducing my debt load. Unfortunately, the strategy backfired; while saving interest in the balance transfer, I more than made up for the deficit with new spending. After a few years of this behavior, I realized the pile of debt wasn't going to get me to the goal of buying my own home. I didn't know what my FICO Score was at the time, but with a frequent rotation of new accounts, short length of average account, and high percent of credit limits owed, my excellent payment history alone could not have made up for the other bad credit habits.

Remember the counselor I mentioned? Well, he offered that one of my options was declaring bankruptcy because it was going to take me a very long time to get out from under the debt. When I heard that, the other values of commitment and responsibility that both my parents shared came shining through. While bankruptcy is a necessary tool for many people, I knew that I had to try using other approaches before considering that option. I just needed to reign in my impulsiveness and replace it with discipline and the ability to say no.

Over the next three years I hunkered down on my spending and continually paid more than I spent, which enabled me to pay off accounts, get out from under most of the debt and start saving for that new home. I also learned around that time that my dad did not spend money in the way that I imagined. Instead, he lived within his means and used credit as credit was needed, a lesson that took me a very long time to learn, but I'm so glad I did.




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