She Strengthens

Transforming My Credit Score: A Journey of Trial and Error

As a 15-year-old, I thought I was doing the right thing by getting a credit card to start building credit. My mom meant well, but we both forgot about the bill, and that single purchase came back to haunt me in college. I was denied credit cards despite having a part-time job and federal student loans. It wasn’t until I turned 19 that I finally got a no-fee card with a low limit from my bank.

The Road to Recovery

I realized that understanding how credit works was key to improving my score. I devoured online resources, learning that certain items would “fall off” my report after a set amount of time, and that paying things off early could actually hurt my score if I hadn’t established a long-term credit history. I used handy calculators to see how different actions would affect my score.

Learning from Mistakes

I’ve made my fair share of financial mistakes, like forgetting to pay off a small charge on my Victoria’s Secret Angel card. I realized that having no pre-payment or pending transaction payment option made it difficult to stay on top of my payments. I called the customer service and asked them not to report the mistake on my credit report, and they agreed.

Establishing Good Habits

To manage my finances and credit score, I created a budget, started saving more, and set up auto-pay with my bank. I tracked my expenses and learned that repetition was key to building my credit score responsibly. I used my credit card to make payments, but had auto-payment set up to cover the charge. This showed that I could use my cards responsibly and control my spending.

Buying a Home

At 23, I closed on my townhouse, which helped improve my credit score. I was lucky to purchase a foreclosure for $129K with a 30-year FHA loan and only 3.5% down. I rented out rooms, earning $700-800/month, which made my mortgage more manageable. Real estate is a form of “good credit” on your report, showing that I was considered financially responsible enough to qualify.

Paying Off Loans

Thanks to extra income and a windfall, I was able to finish paying off my student loans. I used the snowball method for quick payoffs and focused on paying off the balance with the highest interest rate first to save on interest.

Consistency is Key

Throughout my journey, I regularly checked my credit scores and reports. I was thrilled to see my FICO credit score reach 824 at 29 years old. This showed me that diligence, little changes, and big blessings could lead to amazing feats. I’ve achieved a great deal, including a positive net worth, owning a property, and an “excellent” credit score. I still have outstanding debt, but I’m working to eliminate it, and I’m proud of how far I’ve come.