Getting credit with a weak credit history is one of the hardest things on the planet. Banks and credit card companies don’t want to take a risk on you because you have burned other companies in the past.
I saw this happen in a huge way in my own life. I screwed up with a few credit cards and I screwed up bad. I had payments with multiple card companies that were more than six months late. At the time my situation was pretty desperate and I had no way out. I couldn’t afford my rent, in fact one month I had to take out a cash advance on my credit card to get the rent paid. This stuff is embarrassing, but true.
After a while, the limits on these cards was maxed out. The card companies finally shut the cards down and I was written off as bad debt. About a year later (or more – I can’t really remember the time-frame) I decided that I needed to take control of my financial life. I decided to take out some new credit cards.
I applied for several new cards and was of course turned down. Card companies wanted nothing to do with me. I didn’t blame them but at the same time I knew that I would have crap credit for life unless I convinced someone to give me a card.
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The Turning Point
Finally after doing boat loads of research, I discovered that the best option for me was to get a secured credit card. Honestly, they are pretty expensive but at the same time, anyone can get them. You have to put down a deposit and you have to pay fees. I was really annoyed that I let my life get to the point that this was my best option, but that’s where I was at.
I finally decided to annie up and I signed up for a card. In total, it cost about $300. In retrospect, that card was one of the best financial decisions I have ever made. I didn’t make a single late payment with that card. About six months after I took that card out, I was able to get a few unsecured cards and I managed them well. In fact, I have never made a late payment on a credit card, after signing up for the secured card. I now I have a really great credit score. I’m a hair above 800 right now. Of course, this all happened years ago so I’ve had some time to build my credit back up.
A year or so after I first took out a secured card, I decided that I wanted to buy a new car. I was concerned that my credit history would mess me up, but the bank was actually pretty understanding. I told them what had gone wrong, but that I hadn’t made a late payment in over a year. I had to put down a down payment, but was able to secure the loan.
The rest is history. I prefer to pay cash for almost everything now, but can get a loan whenever I want. It’s amazing how things can change for the better if you are simply willing to bite the bullet and do what needs to be done to improve now.