My Debt Story
Welcome to BadCreditEdu.com. My name is John and I’ve lived half of my adult life with bad credit and 500-550 FICO score because of my poor money management decisions and failed home business during college years. I experienced first-hand the pain of living with bad credit, and learned how hard it is to live like a normal person under the constant pressure from stress. But fortunately, with hard work and learning, I was able to get out of my debt and improve my credit score at the same time. My FICO score was above 800. Not only that, I got out of debt completely except home mortgage, school loan, and an auto loan. I was able to manage those two payments easily. When I purchased a new vehicle years ago, I got the top rate the dealer offered because of my excellent credit history and credit score. My awful credit history was cleaned up and it was keep improving.
My goal is to get rid of debts and spend more time with my lovely daughter!
When I defaulted payments on five credit cards with about 10 maxed out credit cards, I thought I was done. I thought there was no way to get back up to pay off all of my maxed-out credit cards and live a debt-free life ever. After 6 months of depression, actually this is a funny story, an agent from a collection agency offered to help. Maybe he got really tired of calling me on the phone or something. But he told me I could pay about 60% of what I owed to settle the debt issue with the credit card company. He helped me setup an automatic payment with the credit card company and promised he won’t call me again every unless I defaulted again.
For some reason, this incident gave me a glimpse of hope. That’s when I started reading debt management books and researched on the web how I could get out of debt. Then I found a non-profit organization that deals with all of the creditors to get lower payoff amounts and setup a monthly payment for me. In return, they asked for a $23/month donation.
By employing this wonderful company, I was able to get out of debt in just 3 years. Meanwhile, the debt collectors were not authorized to call me directly. This company dealt with all inquiries. I paid about $600 / month and then it was dispersed to 10 different creditors each month. Meanwhile, I focused on my finances by getting a new jobs, working day and night.
However, things changed upside down once again. My business went south and my second business experienced 45% cut. Plus my daughter was born. Unlike a corporate job, there was no unemployment benefits or anything. So basically, I did everything I could to make up the difference in my income. But it was not possible to make that much. I once again opened a number of credit cards and basically lived years on credit. So right now, my debt is as high as it used to be. The only difference is that I’ve never defaulted a payment. I checked my credit score in July, 2011 and it was down to 750.
My goal is to get rid of debt completely once again. I will be logging my journey toward debt-free life on this blog to keep myself accountable.
John
June 29, 2011