"Destroying my credit"

I’ve been nostalgic lately, thinking about my past, my upbringing, and some of the wonderful financial decisions I made when I was a teenager. I’ve written about my middle class upbringing and about my stellar education on taxes. But there was one more area of my financial life that I really messed up in when I was young, and it took me a very long time to dig my way out.

Destroying My Credit

My parents never really taught us about the dangers of credit card debt. When I turned 18 and started getting offers for free money, I took them. I don’t know why it was so easy to get credit as an eighteen-year old with no credit history, but man, it was.

I had three regular credit cards and three store cards before I turned 19. Why wouldn’t I get an Express credit card? I even signed up for an Abercrombie card despite never ever shopping in an Abercrombie in my life!  Free money is free money, right?

Not All Impulsive

Yes, I was a stupid teenager buying all the things with fake money. But I did actually make one legitimate purchase that I couldn’t afford!  My dog, Shadow (I miss him!) had a problem with his nose. It always looked like the skin was peeling off. Since he seemed healthy outside of that, my parents didn’t take him to the vet. Well, I wasn’t going to let my lack of money prevent me from taking care of my pup, so I took him myself and charged it. I think it cost around 500 bucks if I remember correctly (this was a long long time ago). Either way, I didn’t have the money to pay. That was future Melanie’s problem.

Related: Managing Your Money All-In-One For Dummies – Get it on Amazon! 

But Mostly Bad Purchases

The rest of my purchases were stupid. The hottest trends in clothing, stupid toys, long distance phone calls, things I can’t remember. I had a lot of fun destroying my credit!  Unfortunately, I was thousands of dollars in debt by the time I turned 20. And I had no money to pay it. I did manage to make the minimum payments for the first few years, but that barely covered interest, and before long all the cards were maxed out. Even the minimum payments became overwhelming for a poor college student. Most of the debt went to collections, and I effectively destroyed my credit.

Digging Out

I finished college and realized that if I ever wanted to have a decent job and a decent life, I needed to fix my credit issues. I was able to settle with a few of the collections agency for less than owed, and I payed off other balances in full. It took a lot of saving, budgeting, and negotiating to dig my way out, but I made it.

Having numerous charged off credit accounts had lots of negative repercussions for many years though. It takes about seen years for those things to fall off your credit report, and life was hard for those years. It was hard to rent a nice place with such a poor credit history. I had to pay higher interest rates on any loans I tried to take out.  I couldn’t even consider buying a home.

 

Helping Future Melanie

I’m glad that I finally dug my way out and that all those negative statements are off of my report.  I currently have a healthy credit report, and a much healthier relationship with future Melanie. Instead of thinking “well that’s future Melanie’s problem”, I think “How can I help future Melanie?” and life has been much better.

Have you had problems with credit in the past? I’d love to hear your stories!

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2 thoughts on “Destroying My Credit and Hurting Future Melanie

  1. Digging yourself out of debt is hard but it seems rebuilding credit history is even harder. I haven’t gone through it myself but I’ve watched others.

    Congrats on sticking to your plan and digging yourself out!

    • Thank you! Its tough to learn when you never had a financial education, but I’m glad I got out of it and learned about FIRE!

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