DAY 4: Pull credit report

I am ashamed to say that I have NEVER looked at my credit report.  I have always been a little careless with my finances but somehow everything always worked out.  Well, almost.  I have been in a couple tight spots a but I will tell you about those later.  I blame some of my lack of financial literacy on these things:

1) My freshman year in college I was on reasonable budget from my parents and my grandfather, but as an 18-year old who has just tasted the freedom of college life, it just wasn't enough.  Everywhere I turned there were booths in the quad offering one credit card or another...persuading students to sign up to get free t-shirts or whatever
worthless thing they were giving away.  The credit limits were very low, but that was just enough to get a new dress for the sorority winter formal or buy a plane ticket to spring break.  When I would max out these cards, I would just sign up for another one and not worry about the debt I was collecting.  I wasn't completely naive!  In the back of my mind I knew I would have to pay that back...I thought I would get a summer job to pay it and I never told my parents.  It was like free money!

2) After college I moved to NYC, then LA then back to NYC.  I never really needed my credit and because I had so many previous unpaid credit card balances I never even bothered trying to get new ones.  In New York I didn't have a car and my parents had to cosign for my first apartment, so my credit was never an issue.  The second time I moved to NYC I subleased my apartment and once again no credit was needed.  Because I never needed to use my credit to buy a home or a car, I never thought about it.  I also never wanted anything to tie me down to one city like a mortgage...I wanted to be free to move whenever I wanted!

Until one day I had to think about it! In 2006 I was working at the Rachael Ray Show in NYC and got a call in the office.  I never got calls in the office so I knew it couldn't be good!  It was a representative from the  US Department of Education that wanted to talk to me about my defaulted student loan.  WHOOPS!  It had been 3 years since I graduated from college.  I think I did the first loan deferral but after that I completely forgot about it. My parents had paid half of it back and the other half was up to me, that was our agreement the entire time.  So at that point I owed somewhere around $25,000.  What a way to ruin my day!  He said they tracked me down and I would either have my wages garnished or set up a payment plan.  I was barely squeaking by in NYC but obviously a payment plan made more sense.  I paid on time for a consecutive 9 months to make it out of my delinquent status and they removed about $5,000 of late and interest charges.  I have made a huge dent in it but I still have a long way to go. Luckily that is the biggest amount I owe and it is in a current and healthy status, which now helps my credit.

I made this for my scrapbook...these pics were taken on that night!
This is right before we had to get out of the cab and walk!

I clearly remember one night in 2003 when I lived in NYC where I could have used a "for emergencies only" credit card.  My roommate and I heard that Britney Spears was going to be at a club in the meatpacking district.  We lived on the upper east side at the time and at night we didn't like to take the subway, so it was about a $20 cab ride.   At the time Britney was crazy popular so we just had to go!  I think I spent my last $20 getting there, but we had a great time and actually got to dance with her.  So it was so worth it!  Problem was on the way home we had almost no money between the two of us!  I thought I had enough in my bank account to get another $20 out but I didn't, and I didn't have any money on my metro subway card.  So we got our change together, took a cab for as far as we could and then did what any other 20-something scantily clad girls wearing heels would do in the middle of the night.  We started to walk home.  I don't know if we were crying or if we just looked like we needed help, but a nice stranger stopped us and asked us why we were walking then gave us $20 bucks to get home!  Divine Britney Spears intervention!

OK enough blabbing bout how I dug myself into this financial abyss...let's talk about my surprisingly great credit score!!!!  Ok maybe not great but it is classified as a medium risk and fair score.  I pulled all three reports online from freecreditreport.com and also ordered them by phone from annualcreditreport.com.  My credit to debt ratio is 90% to 10% which is very good...the national average is 48% to 52%.   I attempted one time to go to a credit consolidation agency around 2002 and I did pay on the college credit cards for about a year, but eventually that stopped.  Those cards are listed on there now as closed with zero balance, even though I know I didn't pay them off.  I guess it is true if you don't touch a debt for 7 years it is wiped off of your account?  There are several other blemishes that I remember but it wasn't  nearly as bad as I thought it would be.  I am going to get those settled as soon as I can!

This is definitely a relief.  Many people my age already own homes and cars, but that doesn't bother me. I am working in the right direction now to improve my score, and I am definitely learning and understanding how to be more financially responsible.