My worst credit mistake
. . .
The story of Mike
the Deadbeat, a stand-up comic who trashed his credit for laughs,
generated lots of feedback from readers who feel his pain.
Many people wrote in to share their credit blunders.
The following are their real-life examples of
what not to do.
And, ouch! Some of them are doozies.
Co-worker trashes credit
I'm plagued by collection agencies threatening to sue and ruin
my credit. My situation: I had a corporate card along with another
person in my company. But after the company ran out of money and
didn't pay the bills, the corporate card -- an American Express
-- reverted back to my responsibility. The thing that makes the
situation even worse is that the other person's card, not mine,
was still being used! I didn't have access to the bills to know
the card was being used because I had been laid off from the company
several months before!
After much wrangling with collectors and the credit
company, no proof has ever been provided that I am responsible for
the corporate card personally, but the damage is done on my credit
report and now I cannot buy a house.
I have a perfect credit rating other than this corporate
Why available credit is
When my credit limit reached $70,000 I reasoned I didn't need
that much credit. My highest balance had been $15,000 and I was
uncomfortable owing that much. So I called my creditors and had
them lower my credit limits, which they had trouble understanding
at first. What a mistake.
Later, when I encountered over $12,000 in legal fees
and another $10,000 in other expenses, I was $33,000 in debt with
only $40,000 in available credit. I quickly lost another $10,000
in available credit when I had to close three accounts after the
credit card companies changed terms and raised the interest rates
due to my high debt ratio.
If I had kept my high credit limits, $33,000 debt
probably wouldn't have caused a chain reaction of changes in terms
with the credit cards. My debt ratio would have been less than 50
percent and wouldn't have been seen as a problem.
The lesson I learned is that available credit is a
good thing. The more the better.
Loan for a worthless, unfinished
The worse credit mistake I have ever made was taking out a
student loan in order to get some computer networking certifications.
At the time networking was hot and anyone that was Microsoft-and-Cisco
certified could make a killing after taking just six months to a
year of school. Halfway through my courses, the bottom fell out
of the economy. I was back working at Wal-Mart as a cashier and
now had a $9,000 loan. Not only was I unable to get a job in my
chosen field, I didn't even get a chance to finish the classes.
I couldn't afford the test fees -- which were well over $100 each.
With seven or eight tests to take, that just wasn't an option. So,
now I am paying for something that I never used and I'm still struggling
to make ends meet. Oh well, live and learn.