Growing up we didn’t have a huge amount of money and at times things were seriously hard – hide from the debt collectors under the window ledge hard. I had no idea what it felt like to have money, nor how important making sure you maintain a good credit score is.
Obviously as I got older, I had money of my own from part-time jobs, and luckily my family’s financial situation improved. Having my own money felt amazing, I could buy treats for myself and go shopping – I was cautious though, as obviously with a part-time job alongside my studies I wasn’t raking it in.
Then of course came my University course. I was told early on that if I didn’t take out the maximum loans offered to me, then a hardship loan later on might be refused to me – true or not I took out the student loans, and the huge overdraft my bank offered me, and the credit cards that bizarrely suddenly found me credit worthy.
Having more money in my bank than I had ever dreamed of, the whole ‘I have to pay this back’ bit didn’t hit me as much as it should have. With my new-found money I went on holidays, I bought nice clothes…I bought myself things that my friends had always wanted that I couldn’t have when I was younger.
Then I had to start paying things back. To begin with it was fine, I was making payments as I was working a lot of hours outside of my studies as I always had done. Then I found out I was pregnant with my eldest son and suddenly my incoming money was dropping a lot and my outgoings were about to go crazy.
I defaulted on payments and ruined my credit score – I didn’t even know what a credit score was at this point, let alone know that I was risking my own.
Over the years I have got to a mostly debt free situation – other than long-standing student loans like most ex students and I have recovered my credit score.
A credit score really is so important, it can be the difference between whether you can get a mortgage, buy a nice car on finance, get a loan for home improvements or to get yourself out of a pickle – or not.
I have a credit card these days, but it is only used in emergencies – mostly when I forget the pin to my other card, or like last year when my bank had some major errors and I couldn’t use my bank card. I also don;t mind using other forms of credit – BUT not in an excessive way and ONLY when I know that I can pay it back easily.
Stoneacre have made up an infographic to help to take you on the road to good credit like myself – hopefully minus the off-roading bits at the start of my good credit journey ;) . They give some very handy tips on how to both check your credit score, improve and maintain it.