What An Improvement

One of my favorite personal finance blogs that I read is Moolanomy, which had a great article on getting your FICO credit score for free from CreditKarma. The FICO credit score is often used by lenders to determine how safe a bet you are for mortgages, car loans, etc. I was in shock when I saw that my FICO credit score is 762, which is pretty darn good! To be honest, I’m thrilled that I have such a great credit score, considering my circumstances in 1993.

Fifteen years ago my credit score was probably in the 500s – which isn’t good. At the time I was working as a temp with a new position every few weeks and would go a few days without any work if there wasn’t anything available, I had a LOT of debt (I probably had 6-7 credit cards at the time) and two college loans, could barely afford to pay rent, was late making payments on everything, including my car to the point where it was almost repo’d, and kept moving every few months because of lack of funds. I was a mess. Granted, I was having a good time at the time because it was the height of my raving days when I thought nothing of selling a few music CDs in order to get the gas money to drive to Rhode Island for a party, or to UVA to spend the weekend with my friends. But I was living a completely irresponsible life – and my credit score showed that quite plainly.

When I got married in 1997 things changed. I got a full-time job making almost twice what I was making in VA. Denis kindly let me put my first few paychecks solely to my college loans to get them paid off. Then I just slowly began paying things off. And slowly my credit score improved.

In late 2000 when Denis and I were shopping for a house I was worried because I knew that my bad credit from 1993/1994 might still show up if a lender ran my credit report. Fortunately, Denis’ credit was excellent because he was wiser with his money, and we easily qualified for a house.

And here we are in 2008. I am down to three credit cards, two with zero balances and one with a relatively large balance, but I’m confident I can have it paid off in the next 2-3 years and be completely free of credit card debt. At that time I’ll close one of the credit cards (the one I’ve had the least number of years) and have two remain open.

To have a FICO credit score of 762 is inspiring – it makes me want to work that much harder to clear out my debt, build up my investments and savings, and continue to become fiscally more responsible so that I can teach my children by example and help them avoid making the same mistakes I made.

Do you know your FICO credit score? Go to Credit Karma and find out yours – at no charge to you!

02 comments on “What An Improvement

  • Pinyo , Direct link to comment

    That’s a great turnaround story about your finances. The important thing is that you made an effort to improve it, and that why your credit score is better.

    Also, you should reconsider closing your account. That will actually lower your score.

    Pinyos last blog post..New Entrepreneurs Must Let Go To Grow

  • Jaynee , Direct link to comment

    Pinyo, the third card has the lowest limit and has NEVER been used. I’ve also only had it 3-4 years. The other two cards I have had for almost 15 years – one was paid off via the life insurance swap I did a few months ago, and the other is being paid off now. Surely closing down that third card wouldn’t affect my credit too much if the other ones – which I’ve had longer and have much larger credit limits – remained open?

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