First Person: I'm Rebuilding My Credit, $50 at a Time

Yahoo Contributor Network

Using my credit card is a healthy part of my personal finance plan. I use it to rebuild my credit so that one day I can purchase a house or a new (used) vehicle. I make it a habit to not charge more than I can pay in any month on my credit card. I carry an average monthly balance of $50 and make sure to pay it off each month to avoid interest and late fees. As I've been doing this for two years now I've been given more and more credit, but I still only allow myself to spend a total of $50 on the card.

Credit Cards

I currently own only 2 credit cards. I keep them at a low balance as I said above. I only have them in order to build and rebuild my credit after some devastating financial circumstances found me in debt to the tune of over $20,000. I receive other offers in the mail often for credit cards but I shred those and get rid of them. I don't want more credit cards to run up, I want to rebuild my credit.

How It Began

I didn't start out with bad credit. I didn't start out owing $20,000. Due to some unforeseen medical circumstances I lived off of my credit cards until the medical situation improved. Unfortunately, I wasn't aware of some of the resources I could've been using to live off of and take care of some of the debt.

What I've Learned

Today, after having gone through some serious credit counseling to straighten out the mess, I have learned how to rebuild my credit. I really think about purchases now prior to making them and avoid pushy sales people who tell me "if you don't grab it at this price..." I've learned their tactics and avoid them like the plague.

If I really want to purchase a big ticket item I will first save the money in a high yield savings account until I have the required amount of money for the item I wish to purchase. Once I have the required amount of money I need to purchase the large ticket item I go ahead and put it on the credit card and then pay the credit card off with the savings. Yes, I could have used cash, but then I wouldn't be rebuilding my credit. This way, I don't overspend and I rebuild my credit at the same time.

Peace Of Mind

I no longer lay awake at night stressed out about paying off my bills. I no longer worry about having enough money to pay the rent or utilities on my home. I budget my life carefully and focus on what I do have and don't worry about what I don't have.

By learning better credit management I've been able to rebuild my credit and will one day be able to afford the house I've always dreamed of owning. By using my credit wisely I am already a step ahead of the game. How are you rebuilding your credit? Are you using your credit card wisely?

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