I have always considered myself a spontaneous and carefree person. Unfortunately, it is that mentality that plummeted my credit score. I look at my credit report and I can't believe the complete mess I got myself into, all because I was trying to live the beyond my income. I now realize that the consequences of my impulsiveness affect my future, my quality of life, and even my self esteem.
I began my string of bad mistakes by getting a divorce. That is another story, but let's just say my credit score was not left unaffected. Going from two incomes to one, debating on who pays off what bills, and the occasional retail therapy did not help my score. There was some bad decision making involved, however the biggest mistake that lowered my score was just ahead on the horizon.
After my life settled a bit it was time to move forward and I needed a car. I am not a wealthy person, but I like nice things so I immediately began looking at cars out of my price range. After looking at cars that were fully loaded, it was very hard to get excited about a used Saturn.
However, I had saved a big down payment (remember my score was flawed and 4,000 down was required at this particular car lot to finance me) and the last thing I want was to settle for mediocrity. I didn't want to put my hard earned cash into something I hated to drive. My friends all suggested that I use this cash and get a car that would be completely paid off. Did I listen? Of course not!
I went for a second look at the "We Finance" car lot with cash in hard. I knew the smart thing to do would look for something I could afford, but instead I choose a beautiful Dodge Charger. Every dime of my down payment was now gone and I signed up for a high interest rate of over 20%.
Of course I was not able to maintain the payments and it didn't take long for the dealership to repo the car. I am certain the car lot was banking on my stupidity. Now I was in the same situation, stuck without a car and out about 5,000 dollars. I struggled to get to work, to be social, and it felt terrible to lose the freedom of driving.
What is my lesson? It's definitely a tough one. I am trying to make better choices financially, and I am thinking through major decisions that require signatures (such as marriage and auto loans). Just as importantly, I have chose to drive a used economy car.
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- credit score