I recently shared my full debt story on Chain of Wealth Podcast. This interview inspired me to create this series. Rise From Rock Bottom tells every story from my failure years - and how I overcame it.
Two days after I got my first job offer, the recruiter told me that the company would not be able to hire me. I had too much debt and my credit was so bad that many of their clients would not allow me to work on their accounts.
I knew when I decided to quit my three jobs and stop paying my debts to go back to school I would have some set backs, but I didn't think that this - my big break that I worked so hard for - would be taken from me in the process.... all because I had bad credit.
I had character references lined up to attest that it was extreme circumstances (not immaturity or lack of responsibility) that sent my finances spiraling out of control.
That way not the first time I had to sacrifice something I wanted because of bad credit. In fact, in one year of bad credit, I has the displeasure of experiencing every single one of these.
You can't buy a car.
Well, you COULD, but it would have to be in cash to make any financial sense (and if you're here, reading this, I'm sure you have a fair amount of financial literacy). With interest rates up to 24.99% for people with bad credit, car purchases don't make sense on any level.
How to survive -
Focus on living and working in big cities. Large cities (like DC, Chicago and New York) have amazing train systems that can allow you to get around without a car while you stash cash away for that car purchase. Trust me, your future self will thank you when your monthly payments don't go directly to paying only the interest on your fancy new car.
Make Uber and Lyft your best friends. Pro Tip: Use UberPOOL! This will save you extra money to put toward that car you're saving for.
Buy an old, crappy car for pennies. If you find yourself in a position where you need a car (like if you happen to land your dream career... in a city with no public transportation) your crappy car will be your best friend. You won't have car payments and you can still get to far away places without the requirement that they be accessible by public transportation.
You can't get a credit card.
When you have bad credit and you reach a position where you're ready to start re-building your credit, you'll find it's nearly impossible for anyone to trust you with their virtual cash. It's not happening... so don't even think about it. You'll get rejected for lines of credit until you show that you can be responsible with other people's money - and that takes time (a lot of time).
How to survive
Do it that hard way. Start paying off your debts, one by one. Slowly but surely your credit score will rise and eventually someone will trust you with a credit card. You may get a card with a $5 credit limit, but we all gotta start somewhere.
Get a pre-paid credit card. If no one is going to trust you, show some initiative and trust yourself with your cash money. Put $300 - $500 towards a line of credit for yourself and start practicing some of those good money habits you know you have. Over time, your credit score will rise.
You can't refinance your credit.
I always thought it's hilarious that credit refinancing will look at your credit to determine whether you're worthy of refinancing.
The people with bad credit are probably the ones that could benefit the most from a lower monthly payment. Unfortunately, you have a history and (in case you don't get it by now) no one trusts you with money.
How to survive
See above. #SorryNotSorry
You Can't Rent A Car
Have you ever tried renting a car without a credit card? After being super frustrated with my debt levels, I turned off - and then cut up - all of my credit cards.
My goal was to pay for everything in cash and if I didn't have the money that simply meant I could not afford whatever I wanted.
That was certainly not a smart decision for when I inevitably needed a rental car. Showing up for a rental car without a credit card is (simply put) a death wish. Some places will demand you show them a pay stub to verify your address. Many places will refuse to rent a car to you at all.
How to Survive
Rent from Dollar or Thrifty rental car. They will allow you to rent a car while placing a $350 hold on your car until you return the car. These are the only two places I've seen that will give you a rental car with very little (to no) hassle.
You can't get a student loan.
When I decided to go back to school, I had to sacrifice a lot to have the time to dedicate to learning a new craft and start applying for full time jobs in my field. I finally knew what I wanted out of life and I wanted to channel the force of Hercules if I needed to.
I successfully got into a program, paid the fee (with the help of my friends).
How To Survive
Ask your family. My dad was able to get a parent loan for me (in his name) so I could get the remaining $5k to complete my education.
Sometimes (if you're really unlucky) you can't get a job.
At the beginning of 2016, I had a target number for the salary I wanted. Months before graduation I was offered a job at that target number.
I was blown away that all of my hard work had finally paid off. When HR rescinded my offer due to poor credit, I felt helpless. The one thing that could help me fix my poor financial situation slipped right from under my fingers... because of my poor financial situation.
How To Survive
Keep this in mind while applying for jobs. I never met anyone that this had happened to so I thought it was an urban myth. Knowing that this is a possibility will help you manage expectations better during the application and interview process. It will also help you cope with losing a job offer.
Be wary of jobs with banks, financial services firms, government, and consulting firms that work with banks. Instead, look for larger firms rather than boutique firms. Even if these firms work with banks, they will likely be able to put you with another team that does not judge you based on your credit.
Stay positive! Cast a wide net and look forward to the journey. If you are offered a job, take the time to talk with HR and let them know your situation BEFORE they check your credit. Trust me, if they offered you a job, they WANT to work with you! They will do anything in their power to close the deal.
Yes, if you have bad credit America hates you! Understand it and get over it! With one foot in front of the other, you will walk right out of this bad credit situation and live to tell the tale.
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ABOUT THE AUTHOR
Cyrene is a fun and accomplished workshop facilitator, learning and development guru and Human Resources professional. Being at the helm of Thrive Lounge has been a long-time dream. Through vision board workshops she plans to accomplish two-way learning. Sharing her vast years of knowledge to motivate and encourage others; while simultaneously getting the reward of great energy, ideas and questions to ponder back from each group. A super win-win. Please join our Thrive Lounge community so you too can benefit!
