Started From The Bottom (Why It Sucks Having Bad Credit)

In hindsight, I was having problems with credit long before I actually knew that's what the problem was. I wonder know how much extra money I'd have now if I hadn't spent years with a low credit score working against me! I was paying utility deposits that I had no guarantee of getting back and even if I did, I missed out on all the interest I could have gotten from having that money in a high-yield savings account. Or the stock market gains I could have gotten from investing it. I also paid a rate for car insurance that likely would have been lower if I'd had a better score for all those years. And speaking of cars? No one had warned me how predatory those “buy here pay here” lots could be with their high interest rates, or how I could be practically forced to use them if I didn't have the credit needed to buy a car. There's so many disadvantages to having bad credit, and they all add up.

Once I realized how many things were tied to credit, my entire focus went to one question: how can I raise my credit score? I could have tried to find a credit repair company, but companies like that are known for predatory practices. Usually, they charge you without any guarantee that they'll improve your situation enough to be worth it. Most of them don't have access to any special tools or methods of persuasion, so average people like us should be credit building without having to pay them as middle men.

Knowing that there's a lot of financial traps out there, I started looking for credit tips and information. I knew if I made it my goal to get credit repair for free, instead of hiring someone to do it, I could avoid the worst of the scams. My goal became to raise my credit score on my own. Not only that, but to get my credit repair fast, or at least as fast as possible, so I could start reaping the benefits of a better score and level up my finances.

My first step in fixing my credit was finding a way to know what my score was. I did a Credit Karma sign up as soon as I heard about it, since it's a free way to check your score as often as you want. (Not a sponsored endorsement, just a fact!) There are some online who question Credit Karma's accuracy, but the more research I did, the more I came to realize that a person's credit score can be a different number from different sources for many valid reasons that don't have anything to do with being inaccurate. Behind the scenes, there are multiple scoring models used to determine your credit score. Although the same basic best practices apply to using credit well and improving your score, different models can weigh one factor more than another, which leads to discrepancies. I ended up using Credit Karma because they give you free access to two different scores: TransUnion and Equifax. This would give me more to go on than just seeing one of my scores at a time.

If I'd had existing credit card debt, my next step would have been to get a credit transfer card to get my interest payments down to zero as soon as possible. I'd also get a credit limit increase if I had a card already. Since my problem was much more about not having enough credit than having bad credit, I instead focused on a way to raise my credit score fast by getting my first credit builder card. (We'll get into that in the Credit Builder post!)

It took a lot of time and sifting through tons of information to get to the point where I truly understood the ins and outs of credit and formulated my own way to get to the score I wanted. There's so many reasons that the time and work for my credit building paid off, though. I needed to get far away from the world of high interest loans, unaffordable monthly car payments, denials for rental applications, predatory credit monitoring companies asking for money when others offer the same service for free, and paying more for every product or service offered by people who can check your score. It sucks to always have stuff like that getting in your way, so I was plenty motivated to put in the work!

My story will continue in the next post, but if you're inspired to take action now so you can dig yourself out of these problems like I did, you can start by checking out my free list of beginner credit cards and all their perks by getting the beginner credit card breakdown!