In the last couple years, I have documented my financial struggles and triumphs when it comes to personal and business. I have talked about Nice Girls Don’t Get Rich, Running A Business and Paying Off Student Loans, Zero Budget Method, Shopping At Aldi, Rebuild Credit and many more topics. I personally believe, I cannot tell my story if I don’t share the ugly parts of my life. That will never inspire you or others to improve your life. Today, I want to share something with you that happen last month. I legit screamed and text Liz immediately when this happen. As mentioned before also, establishing a relationship with a banker is so important. Liz is essential to my story of changing my credit.
Friendships With Banking
Okay, if you do not know I am African American and our community is not that great when it comes to money. It has been said it would take 228 years for us to catch up to our counterparts. So, I never really had the conversation on saving, credit cards, building credit and more. I grew up in a single parent home raised by my dad. He did a great job raising three kids, btw. Fast forward to several years out of college and I have horrible credit, default student loans and much more. My old banker has left and placed me in the care of Liz. Something in me decides to share everything regarding my life with her. Telling her the things that are not going right. She offers me more than banking advice, she helps me understand budgeting, credit, and much more. Liz told me to get a secured credit card. It took me a year to do, but I finally got one.
Picking A Card
As I stated, my credit was shot. Like 400 credit score and I think they were nice just giving me that. At the time I was getting my student loans out of default by utilizing a program for people who had struggled in the past. My payments were like $75 a month, which was not paying off the debt. I started researching different secured credit cards online to see what was out there. USAA was my choice for secure credit card mainly because I had my car insurance and home insurance with them. I just wanted to bundle everything and make it simple on me.
Something I learned after getting the card was you should only utilize 30% of the card or any credit card a month. I was virtually maxing it out going to Houston every other weekend visiting my mom at the hospital. I would put my hotel, gas and food on there. The card balance was paid off every month. Another thing I learned about secure credit cards is you can not just transfer them over to a regular credit card. I wanted to do this with my USAA card and they told me to apply for another card. Within six months to a year after continuously paying your card on time you should receive other offers for credit cards.
Other Credit Cards
After 90 days of using my USAA secured card, I was receiving nonstop offers for lines of credit. Please note every time you apply for credit that is marked as an inquiry on your report. You do not want too many inquiries on your credit report; this can be seen as a negative. Once again, I was back to doing research with my credit card process. Applying for a Credit One and Capital One card and approved for both. Let me just say stay away from Credit One I had too many issues with them charging my card for credit monitoring and other stuff I canceled. In addition to that, its good to note that all three cards had high-interest rate because of my bad credit. Which was fine in my eyes because I was paying them off every month. After several months of having these cards, my line of credit increased from $300 to $2500 on my Capital One, and my Credit One went from $300 to $500.
I closed out my USAA secure credit card and went to a regular credit card. The $300 that I used for the secured card went back into my savings account.
Study Credit Report
During all this time I was ordering my credit reports making sure I was diligent in removing things that did not belong. I know “credit repair” companies are all the rage in our community. First, off no one knows my social security number outside of my parents and me. I am not giving a strange that information access. Outside of me hearing countless scamming stories about credit repair companies this is something you can do on your own, you are paying for convenience in the situation. This is true with any service base business you are paying for them to do it for you and make it easier.
I would sit down for a maybe three hours going through my credit report. Yes, my reports were a lot because of me moving, defaulting on student loans, closed credit cards for non payment and much more. I would look between the three of them to see if there was any errors. Then I would highlight the wrong information on each one, and then I would send letters to the companies. Things that really helped were removing addresses, names and accounts that were past seven years off my report. Like I said before keep your inquiries down for credit. These days they run credit for everything. You are able to get three credit reports a year. My request is sent in by mail, I have become my father and prefer keeping a paper trail of everything.
Payments, Research, & Declining
During these 16 months of working on my credit, I made sure all my cards were paid on time and if I did carry a balance I paid more than the minimum payment. We want to build credit but only paying $25 on a $1000 balance. That does not help you at all. Two years ago, I read an article about how millionaires work on their finances four hours or more a month and the average person was like one hour. That hit me like a ton of bricks, and from that day on I decided every Monday I would spend 30 minutes to an hour in front of my bookkeeping software. On the first of the month, I spend most of my day looking at all the numbers, interest rates and more for my personal and business stuff.
My financial journey has been full of research to be exact. Study what others said worked for them and learning what works for me. Like I took tips from Dave Ramsey to help my Zero Budget Method, which transformed my life. This is something I suggest for everyone to do when wanting to be better at whatever. Take the time to learn about it. I learned that my credit history needed to be diversified and much more.
Declining the crazy credit card offers and lines of credit that were extended to me was hard. I felt omg I finally made it I need these, but research taught me different. Studies show most millennial have on average 15 credit cards with high balances. I didn’t want to put myself back in the same issues of my past.
Navy Federal Credit Card
Almost nine months, ago I opened a Navy Federal credit card they gave me a $2500 limit with cash back. Once again, I paying almost double my minimum with them every month and I have a several accounts such as checking, savings and ROTH IRA with them. During the time period of having this card I tried to get a line increase on another card and was declined. Waited maybe three to six months to try again, but with my Navy Federal. You can request your line increase in the app, you have an option to put in a number yourself or let them pick. At first, I was going to do $3500, but something told me to let them pick. My heart dropped when it said $14,000 limit. If you have good credit then this is normal for you. However, for me I was on the journey of rebuilding.
Going from a secured credit card to $14,000 limit in less than 18 months took some serious work. I am being straight honest, this was not easy for someone who likes designer stuff and when she gets stress my first thought is to shop away my problems. Managing my money with a budget, not overspending, ordering my credit reports, not taking every card that came my way and more got me to this point. My credit has gone from a 400 to 700 because of all the things I have done. In banks eyes, I am a good risk to take when it comes to my finances.