Credit Resuscitation

A short list of things that will kill your credit: not paying your bills (check), overspending on credit cards (check), bankruptcy (check), automobile repossession (check), home foreclosure (check).

I’ve made my fair share of bad decisions, and most of these I attribute to being young. I was twenty-two when I filed for bankruptcy and two years later, when my then soon-to-be (and now current) husband and I realized that it was time to buy a house, my credit score was 480. After a divorce, I had spent two years rebuilding relationships and atoning for my errors in judgement, but I neglected to consider rebuilding my credit. This left me with a credit score that labeled me as someone who was not to be trusted with money.

Still, somehow I was lucky enough to find Team Neal and make that fateful phone call. Rather than scorning me for being a terrible person with terrible credit, the mortgage professionals there gave me direction and helped put me on the path to good credit in just a few simple steps.

The first thing I had to understand was that just as I didn’t get myself into this situation overnight, I wouldn’t be able to repair it overnight. In fact, it took me about eighteen months of following their advice to rebuild my credit.

The Golden Rule of rebuilding your credit is: pay your bills! If you bought something or signed a contract for a service, pay for it. Nothing is free. If you’re spending more money than you’re making, it’s probably a good idea to look at where your money is going and develop a budget. 

So I was paying all of my bills on time to rebuild my credit, but that wasn’t enough. What I really needed was to open a line of credit so that I could prove myself. Only problem is, with such a low credit score and not-so-stellar past, no bank was going to trust me with a line of credit. That’s when Amy at Team Neal told me how to open a secure credit card. The way it works is I give the bank money (not too much- I did $300) and they give me a line of credit (for $300) . I had to pay a monthly fee for this service, so it’s pretty much like I’m paying the bank to hold my money and give me credit because they don’t trust me. But after about twelve months of using this secure line of credit, I saw a big improvement in my credit score with my good payment history.

There were a few other pointers that Amy gave me about credit cards. One big one is to use the credit card to show activity, but keep your balance to credit line ratio at 30% (ie. if you have a $1000 limit, keep your balance at $300 or less). Another pointer is to not pay old collections without consulting your mortgage professional. If you do, it may make them seem current (remember your credit score is primarily based on the past twelve months).

These tips and strategies are what worked for me. For a customized strategy that is tailored to your personal situation, contact Team Neal. The sooner you begin, the better.