How this blogger increased her credit score from 560 to 730 in just 2 years
Like many 20-year-olds fresh out of University, Adriana Dikih was not the best at managing her money. The 32-year-old digital marketer and vegan food blogger, who lives just outside of Portland, Oregon, experienced what she called a “credit disaster ”after graduation.
Dikih graduated with a liberal arts degree, but like many recent graduates, could not find a solid job to pay for this expensive education. “I worked in restaurants like many of my generation,” she says. “I think what I went through is really relevant.”
She wasn’t struggling at all. She was able to support herself, travel and even save some money. “But I wasn’t as interested in tracking my credit or paying my bills,” she said. Student loans, in particular, was a major monthly expense that was overlooked. “I tried to go through the postponement process. I couldn’t … and I just didn’t pay them. Not a wise decision.
Deep down, she said, there was a gnawing feeling that her credit was a mess, but she kept her head in the sand with fear and shame. “I didn’t know and I didn’t want to know,” she said. “I didn’t really want to hear a number because I think a lot of us associate that number with a reflection of our worth. If we have bad credit, we are a bad person, we are irresponsible. “
Of course, a credit score is just that – a number. It is not a measure of character or intelligence. But a bad credit score can certainly wreak havoc on your financial life, and it takes a little dedication and patience to fix it. This is exactly what Dikih learned. Here’s how she got her credit back.
From “ Out Of Touch ” to In Control
Every few months, Dikih’s car broke down and needed expensive repairs. She had financed her last car purchase and knew that if she wanted to take out another loan for a new car, the dealership would take the credit off her first. It was the trigger that pushed Dikih to get over his credit situation. “I was like, ‘OK, I need to sit down and get the credit and see where it’s at,'” she said. It requested his credit score information online, printed it all, took a deep breath and faced reality.
“It was a 560,” she said, admitting that she was actually relieved to see that number. “I thought, I don’t know if a credit score could be a 200, but mine could be,” she joked. A 560 seemed like something she could tackle.
The next step in his action plan was to find out what, exactly, was contributing to the low score. “I didn’t even know what debts I had unpaid or if I was collectionsDikih said. “I was really out of touch with what was going on with my finances.”
Once she pulled it credit reports, it turned out that there were three major problems causing her bad credit. The first was an old phone bill that was never paid and sent to collections.
“When you have a bill you haven’t paid, late fees, fines and penalties can add up to more than the actual amount you owed,” she said. Dikih began to research how to negotiate with debt collectors and settle for less than what is owed. In the end, the original bill of only around $ 50 ended up costing him a few hundred dollars. But removing an overdue account from her file has helped her focus on repairing her credit. “It hurt, but I was totally motivated and motivated.
Next on the list was a credit card with a balance of about $ 2,000, which she paid off with savings.
Finally, Dikih had to collect his student loans, which were on the verge of default, back in order. “The student loans that I always carry with me,” she says. “I pay on time every month now, but I still have derogatory marks to my credit that will stick with me for up to seven years after they are paid – that is, when I turn 70.”
Eventually she was able to finance a new vehicle at an annual rate of almost 20%, “which is outrageous,” she said, “but I was willing to do it in order to start building a history of. positive payment. ” Recently, she was able to refinance her car loan at 2% APR.
She also opened two secured credit cards. After six months of on-time payments, card issuers turned them into real credit cards. Her fiance, who had great credit, also added her as an authorized user to a few of her credit cards. They even bought a house together.
Despite some lingering negative ratings to his credit, Dikih’s score has gradually increased thanks to his hard work. After about two years it is now hovering around 730 – considered well in the “right” range.
Don’t let fear sabotage your financial life
Although Dikih considered hiring a credit repair company to help her repair her credit, she finally decided she could do it on her own. After all, his biggest obstacle had been his own unwillingness to be proactive. “I used Google to find everything. … I had a fire under my ass to fix it.
She was keeping an eye on her progress, and every little bump in her score was enough motivation to keep going. “For me, the most important thing was to overcome the fear,” she said. Once she knew where she was, it was just a matter of making her finances a priority.
“It’s just a number,” she said, one over which you have control if you want to.