Guest Post from Kristina!
I had minimal knowledge about finances until I turned nineteen years old. This was the year my mom was diagnosed with stage four cancer. It was time for me to start getting serious about finances. I had to take control.
Ruin your credit, ruin your life
A little background on me: I grew up in the back of my Dad’s T.V. repair shop. My dad passed away unexpectedly shortly after I turned five years old. My mom hailed from another country arriving to America in her early thirties. Because of this, she lacked any credit history.
My mom married her second husband, a co-worker, and purchased a house together. He was not a kind man to her. Unfortunately, she chose to buy the house with him. She lacked any kind of credit history, and felt compelled to get it
Prior, to my mom’s passing, she told me why she had to buy a house with her abusive husband.
Her words that I still live by today: “Ruin your credit, and ruin your life. Credit history is difficult to fix. Your credit history is your lifeline to obtaining loans or buying a house.”
She continued “I had to buy a house with someone whom I’m stuck with because I didn’t have a credit history.” I refused to be in a similar situation. I crave financial independence.
Finances and salary were not topics of discussion at my house. In fact, I didn’t know she was married to her second husband until I was twenty. I had no clue about her income. Despite all of this, my mom did something for me that helped set me up to get a perfect credit score.
Thanks to my mum, I had a good credit history young
When I was sixteen years old, my mom authorized me to be a user on one of her credit cards. Of course, she was wise not to give the physical card to an unemployed teenager. A term later learned “credit card piggybacking.”
Because of this, when I turned eighteen and the credit card offers started rolling in and filling my mailbox. I opened an Amazon Credit Card and a Victoria Secret Card (I hardly used it, don’t judge!). 0% APR for a year, and 5% cashback was a dream.
I remained ignorant about credit scores. I only comprehended that you must pay the cards every month on time. Thank goodness for this!
Later, I discovered my credit score was in the high 700’s. I used the credit cards as I would a debit card. Pay off the full balance every month, on time without fail. By the time I was twenty years old, I had a credit score well above 800.
I am now a homeowner, equipped with a sexy 830 credit score.
I was able to buy a home and currently have a credit score of 830. This is something I am proud of.
What’s the secret to an almost perfect credit score? There isn’t just one. It’s a combination of different factors that make up the whole picture.
- Paying the very minimum on time every month is crucial. What if you can’t pay the minimum? Call the credit card(s) company and politely ask for an extension so late fees do not occur. Trust me, a 10-minute phone call –it is worth waiving the $35 or so fee, and a ding on your credit report for late payment. I tell people who are struggling, that the credit card companies can work with you if you put a little effort into it.
- Keep debt as low as possible
- keep older accounts open and avoid opening new accounts in a short period of time-limited.
- Monitor all three credit scores. There may be wrong information that needs to be disputed with the agencies.
I’d like to formally thank my mom or as I’d call her “Mum.” right, now. It’s because of her that I am now in charge of my finances and my credit.
Wishing you luck in all finance endeavors!