Plain Advice

As I mentioned in a previous post, I have had credit problems in the past.

After a few years of acting irresponsibly with money, I started to experience some unpleasant consequences. One of the first experiences hit home when I decided to move into my own apartment. I was still single, and up until that time, had always lived in student housing near my school. But as a new college graduate, I wanted to branch out and live on my own.

I went into the rental office of the apartment I decided on, and filled out an application. I received a sobering phone call a few days later; I did not qualify to rent because of some negative items on my credit report. Talk about humiliating. The only way I was able to get the apartment was by having someone co-sign with me.

Why Me?

The reason for my poor credit was due to some bad decisions, and negative patterns I established in college. By the time I graduated, I carried with me some debt that I got really good at avoiding. I dodged calls from creditors. I also became proficient at avoiding the mail they sent me, sometimes never even opening it. Out of sight, out of mind, right?

When the creditors did get a hold of me, they weren’t very nice. It got to the point that they were often unwilling to work with me because I had such a poor history of following through on payment arrangements. I would feel victimized and angry when I would get off the phone with them. Why were they picking on me ?

I’ll tell you why they were picking on me (its obvious, I know, but I really didn’t want to face it at the time)…

I owed them money, and I was not following the agreements I had made with them! They had every right to come after me with the phone calls, and I deserved the lack of trust they had in me. At that time in my life, I was not showing a whole lot of integrity or character when it came to my financial obligations.

Credit Defined

The concept of “credit” is simply a system that tags you as a person who can generally be trusted to follow through on your obligations, or not. The former has “good credit”, while the latter is considered to be a financial risk and liability (and therefore, carries “poor credit”).

It took me some time to realize what my credit problems were saying about me. It didn’t matter how dependable I was as a friend, or how great I was as an employee. All my creditors could see was the side of me that didn’t do what I agreed to do. And I was labeled as such.

My Motivation

When I came to understand that my bad credit was not only limiting me financially, but was actually earning me a label me as an unreliable, even dishonest person, I was spurred to change. Because at my core, I am a person of high integrity and I can be trusted.

I decided I wanted my credit to reflect who I really was, and am.

I know there are plenty of people out there who have poor credit due to circumstances beyond their control; divorce, death of a spouse, medical bills, identify theft, etc… If you are one of those individuals, maybe this article doesn’t apply to you.

But let’s get real. Are you really one that has had no control over your financial matters? Are you making excuses?

I was discussing these ideas with a friend of mine. We were disagreeing on the point that credit is usually a reflection on character. She said something along the lines of “I would pay my bills if I had the money”. She felt that the fact that she doesn’t have enough money to pay all her bills meant that she was off the hook when it came to the character issue.

The flaw in this way of thinking (and I told her so) is that if you are acting with honesty (to yourself and others), you won’t make financial commitments that you can’t afford to keep. So the fact that you can’t pay your credit card on time because you don’t have the money doesn’t mean that you are innocent of wrongdoing. It means that you made a promise without a way to follow through on it.

Understanding How the Creditor Feels

How would you feel if you went to work for somebody, but when payday arrived, your employer told you “I’m sorry, but I don’t have enough money so you won’t be getting paid”?.

You would be mad, and feel betrayed. You may be in financial crisis because you were expecting to receive that income. You wouldn’t care why your employer had no money. The fact that the employer is short on cash wouldn’t help the situation at all, no matter how sincere he was in his apologies. He made a commitment to you that he couldn’t keep! That is a seriously dishonest thing to do.

Even worse, imagine the above situation, but instead of telling you up front that you wouldn’t be paid, imagine that your employer couldn’t even be reached to explain where your (non-existent) paycheck was. What if she wouldn’t answer your calls and ignored any other attempts you made to communicate with her.

I imagine this is how it is for a creditor (on a different scale of course) who lends you money and then gets the shaft from you when it’s time to pay them back.

Getting to the Point

My point through all this is not to say that if you have bad credit you are a terrible person. I have had a bad credit history, and I am one of the best people I know!

My problem was that I was not not living congruently in all areas of my life. For me, coming to this realization motivated me to change my behaviors regarding credit.

If you have bad credit, take a good, hard (sometimes painful) look at yourself.

Who are you, really ?

Who do you want to be?

The wonderful thing about life is that you can change, and that is especially true when it comes to your credit. My credit has improved dramatically and continues to do so every time I keep my financial commitments. You can do it too.

Even more than the practical financial limitations your credit is having on your life, dig deeper to see what your credit might be saying about you . What you find could very well be the motivating factor in helping you change your financial behaviors for the better.

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This entry was posted on Saturday, August 25th, 2007 at 12:10 am and is filed under Finances. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.