I did something really stupid, and it was all because of what I read in a book.
This was many years ago, before I knew anything about how to build and protect my good credit.
I was a single mom at the time, just making ends meet, working as a receptionist for The Southland Corporation. It was a fun job when vendors stopped in and gave me all kinds of free samples, in hopes of getting an audience with an executive who would buy their product to sell in the 7-Eleven Stores nationwide. It was also incredibly boring at times, and that is why I started drinking coffee. Anyway…
On $7/hour, I managed to pay my rent every month as well as my other bills. I didn’t have many bills, because without much money, I didn’t spend a lot. However–
I did have a Macy’s account with a balance. It was from clothes purchased for my kids and myself. Then I read something in a book.
It said if you can’t pay all your bills, it is no big deal to skip a store credit card.
So I decided to skip payment for the month. No big deal, right? It’s not like rent where you have to pay or get kicked out of your apartment.
When my Macy’s bill came the next month, I was a little shocked to see how much interest had piled up. I’d been used to not paying interest since I normally paid off the bill each month.
Not only that, but there was a late fee, too. Yowzers! That was a lot of extra money I now owed, and that hurt, because I didn’t have extra money to throw away. Not on my small income.
I called Macy’s and apologized and asked if they would waive the extra charges. That was mistake #2. I had just admitted my guilt.
They said no. Of course they did. So I paid the extra interest and late fee; but the pain to come was much worse.
The next year, I got a new job and my income improved. The sale of the house from my divorce went through, and I received my half of the proceeds. Now I was ready to buy a modest home and stop renting.
I didn’t know anything about mortgage loans at the time, so I relied on the loan officer to guide me through the process.
To my complete and total SHOCK, I learned that I could not qualify for the best and cheapest loan –the conventional loan. Why? It was all because that one late payment to Macy’s had torpedoed my credit score! My otherwise perfect credit was shot all to smithereens!!!
I had to take the FHA loan. That meant paying the 1.75% upfront fee and paying more in monthly mortgage insurance.
I was so mad at the author of that book for saying skipping a store credit card payment was “no big deal.” What a load of garbage advice that was!!!
Lesson learned the hard way.
That painful lesson led to my journey to learn everything I could about credit, to entering the mortgage business, to entering the credit repair business, to getting my certificate at a credit education for 20 hours completed, to interviewing top executives at Fannie Mae, TransUnion, Equifax, and more. It took a good decade to acquire boots-on-the-ground knowledge and to gain insider experience.
Now, I urge you to save yourself and your family from going through the financial pain I went through. Take a quick read through Build and Protect Your Credit Like the Pros (see here), and I promise you that you will have the equivalent of getting a Masters Degree in Credit Scoring (if there was such a thing).
If only my younger self had been able to read the book my older self had written! Ha! God bless you on your journey through life and may all your credit decisions be good ones.
Thank you for your emails and your books. I bought all your books and read them. I filed bankruptcy during COVID and I hated myself for it. I was always the responsible one, I to am a single mom and I was determined to keep my daughter in private school (she’s thriving with a 4.050 gpa) I’m not out of the woods yet and I’m determined to start my own business and buy a house one day and your books are very helpful, user friendly and I follow your prompts and slowly but surely I am building. I also appreciate your transparency I feel you truly want people to succeed! I appreciate your work
Sometimes filing BK makes the best financial sense. Don’t feel bad about that any more. Life goes on, and by building good credit after the discharge, you can qualify for a good home loan. For self-employment, you need to be self-employed for two years and show enough income on the Adjusted Gross Income line of your tax returns to qualify. Sometimes it makes sense to buy the house before starting a business — it all depends on your circumstances.
Thank you for reading my books and for your kind compliments. That means the world to me!