Bad Credit Blog. Share, Learn, Improve Your Credit.

In my line of work I hear people say it all the time, “I have the worst credit ever. Can you help me buy a car?”. So that got me to thinking. How does someone get to that point of having REALLY bad credit? I also though about what could be done to help people with really bad credit. Maybe I can share some of my experiences find other people to share theirs.

In my experience, it seems that people earn really bad credit for one of 2 main reasons. Either they get bad credit because of an extenuating circumstance that is really beyond their control, or they get bad credit because they lack the ability to pay their bills on time. In the second main reason there are really 2 sub-categories. The first is people who cannot pay their bills because they spend more than they earn and the people that cannot pay their bills because of laziness and lack of foresight when it comes to paying their bills in the future.

As an example of reason #1, we often get customers that make good money, drive nice cars, and have a lot of bills. Then something happens, whether it be divorce, loss of job, illness, or some other major life event, and all of a sudden it becomes very difficult to pay the loans, credit cards and other debts that have been accrued over the years. When something like that happens, it is usually very easy for us to help. When there is a singular life event that affects your ability to repay your debts it it obvious on your credit and we can convince lenders to give you another chance.

There are similar people with similar jobs that never can seem to quite get their act together. Maybe their car payment is always a little late, maybe the minimum payment on their credit cards does not seem like a big deal, maybe they decided not to tell one of their creditors that they changed addresses and since they are not receiving the monthly statement they decide the bill does not need to be paid. This type of person will eventually come to the realization, “Maybe I should have taken my credit more seriously.” Often by that time it is too late.

When you establish a long track record of not paying any meaningful bills, you will earn a very low credit score and any loans or credit cards you receive will be unfavorable. Loans will have a high interest rate and/or a high down payment requirement. Credit cards will have higher rates and/or high fees.

It seems so obvious to most of us, but to people with chronic derogatory credit it does not seem obvious. In fact, usually they tend to blame it on the bank, or on the postman for losing the mail, or for someone for stealing their identity. Why would someone want to steal the identity of a person who has never paid a bill in their life up to that point? They wouldn’t.

In my job I often interview people about their credit. Sometimes I ask someone about a particular account on their credit, and before I get a chance to congratulate them for having that one positive account, the customer says “That account isn’t mine, someone stole my identity.” It is hilarious! The one actually good item on their credit, and they say it wasn’t them. Do they think someone stole their identity so that they could pay a loan or credit card on time? I usually tell them to NOT dispute that account because it is the only piece of positive credit on their bureau. Usually, it was an account that was in their name AND another person’s. That is why it actually got paid on time…the other person made sure of it.

So what are we looking for on the blog? We are looking for people that have questions about their credit and we are looking for people that have meaningful thoughts to contribute. Perhaps someone can share their bad credit story and how they were able to turn it around. Maybe some experts in the credit or law fields could have some ideas to share. I do not know what kind of response to expect, but I hope it is a positive one.