Bad Credit - Dan's Credit Disaster And His Path To A 700 Plus Credit Score!
Did you know that with all of our recent economic difficulty that research shows 25% of all Americans have bad credit and this number appears to be growing. In other words these individuals have a FICO score of less than 600 and are viewed by lenders as having bad credit.
Getting bad credit can happen to anyone it does not discriminate: young, old, poor, wealthy ... The truth is many of the wealthiest citizens in our country have VERY BAD CREDIT. There is plethora of paths for your score to fall below 600. However you can not only fix your low credit score but you can get it back to a an excellent rating of 700 and higher. You can do this without waiting 7 long years!
We would like to share a real story of just how easy it is for your score to fall below 600. A few years back we had an intern by the name of Dan that worked with us and recently reached out to us for some advice on how to fix his credit disaster.
Dan's Story of Bad Credit
Dan was an average guy a few years out of college. He was happy to be employed with a well paying company, though he by no means had made it to easy street.
He knew his credit wasn't perfect because he had made past financial mistake specifically using a unsecured credit card in college. However he knew his score couldn't be too bad because he had been approved for a major credit card even with this mistake on his report.
His card had a very high limit and had recently even increased to $2,000. He assumed that he must be doing some things right because he had been approved for this credit card after the 'mortgage collapse' and the banks had revamped their approval requirements.
He assumed his credit was okay. It wasn't great but it wasn't bad. Which was very similar to his financial footing in the world, it was okay. He would occasionally pay late on a student loan, his credit card, and even other various bills.
How Bad Credit Sneaked Up And Bit Him In The Butt!
Dan was given a promotion with his employer which would provide him a significant increase in salary but he had to relocate. He eagerly accepted this and was actually looking forward to the move!
While making this move he was in a serious car accident, no injuries, but his car was totaled. He was stranded in in the middle of nowhere and was starting to grow concerned as he had only been given a week off work for this move. He only had 3 days until he was expected at his new position but he was stranded waiting for news about his car.
He had contacted his insurance company and assumed everything would be fine in a few days and he could worry about getting his car squared away later. His priority was showing up ready to work on Monday. So he rented a car and finished his trip.
When Monday came around he was there and ready to get busy! He was really enjoying the new responsibilities and expectations of this new job title and of course the increase salary. However after about a week and still no word on from his insurance company he was growing concerned. He finally heard from them and was told his rental car was not covered under his insurance policy.
He had racked up over $500 in rental fees already! And he wasn't sure how he would continue to get back and forth to work, pay his bills, buy groceries, and make ends meet with this unexpected added expense... Luckily his employer was very understanding and gave him an additional week off work to find reliable transportation.
Dan was so thankful he immediately started looking at replacement cars. He had spoken with the mechanic who told him his car wasn't fixable and would be totaled out by the insurance company. And he would get a check from them.
Dan figured that since he had a much larger salary he could afford a nicer car. After a little bit of searching he found a car he was interested in and decided he had better go ahead and check his credit score prior to making this purchase. He was hoping to pay a reasonable interest rate because he knew his score was ok - not perfect - but not bad.
He went online and checked it, Dan's jaw dropped as he stared at the computer screen with this three digit number as if it were first time he had ever viewed a woman's breasts. He couldn't believe what he was seeing!
He said to himself "this can't be right, this must be a scam, a joke, or some glitch in the system" but about 20 minutes later he finally resigned himself to the fact that this number was accurate, and he had bad credit! His score was a meager 517!
Clearly his options for a replacement car were instantly limited and the car he had decided upon was most likely out of the question because financing it didn't seem to be a viable option. However he worked up the courage and decided he had noting to lose by at least exploring financing.
Unfortunately that wasn't true and he says this decision led to one most humiliating experiences of his life. When he went to a dealership and told them of his situation, conveniently leaving out exactly how low his score really was the dealership wanted to prequalify him before showing him any cars.
As he waited in the finance office and began to wonder just how outrageous of an interest rate he would have to pay his thoughts were interrupted by the sound of laughter. He quickly realized it was finance officer and he was viewing the results of his credit score! Dan says he didn't say a word, got up, and immediately left!
This was just the beginning of Dan's credit disaster. It turns out his insurance company fought his claim. The eventually did pay however he was left high and dry for almost 4 weeks without a car! His employer was forced to let him go, he had just signed a new more expensive apartment lease, he lived in a new area, and didn't have a job or much savings remaining after his move.
After these 4 weeks he had lost his new job, still had to find a car, and was over 2 weeks late on rent. He wasn't sure what to do with himself as he now had no job options, no car, late bills, late rent, minimal food, and had borrowed every dollar he could from family and friends.
It took some time but Dan eventually got back on his feet. He found a new job and was able to get a car, granted an older beaten up car but transportation. Dan told us that during his job search he was once again smacked in the face with his bad credit!
He had found a new job however his employment was contingent upon a credit check. Once this potential employer ran his credit, communications stopped and about a week later he received a letter in the mail saying the position had been filled. He has no doubt that this was due to his bad credit history.
He says "it was like kicking a guy in the family jewels when he was down and out" and wondered to himself "how am I ever going to fix my bad credit score if I can't get a job to pay my bills!"
(Experts say the number employers that now require a credit check prior to employment is rapidly on the rise.)
The first step Dan took once finding a job was to hire a credit repair firm to fix his credit score! He had some prior knowledge of just how difficult it can be to fix your report yourself! And instead figured an expert credit Attorney and the $50 a month to pay him was well worth the money! And said "with such an important and influential number in my life, why mess around and try and do it myself?"
He hired the Lexington Law Firm a popular credit repair service and they got to work immediately. He really appreciated that all he had to do was pass along communications from the bureaus to Lexington. He said the favorite thing was getting the letters for the bureaus that notified him of the removal of negative items on his report.
Dan
went from an humiliating 517 FICO sore to a 683 score in just over six months. We must say these results are not typical and Dan was even shocked at how quickly and substantially his score had gone up.
He is eagerly waiting for his score to get over 700 and has plans to return to the initial dealership and finance officer that had laughed him out of their office! He is so thankful and happy that he is now being offered credit by just about everyone and can get approved for financing just about any purchase.
He was recently approved for another major credit card with an initial limit of over $4,000. He says he loves that he now pays low interest rates and best of all he knows this three digit number will never again cost him a potential job, not to mention all the money!
While Dan's story is unique and specific to his current situation you can also experience similar results. No matter how low your score is today, you don't have to just live with this. You can remove the negative items and also get a 700 credit score for yourself! And without just sitting around and waiting seven years!
Email us if you have questions. We want you in your dream home too!
