J.K. Rowling, the author of the Harry Potter Series, was famously down on her luck prior to the publication of her books about wizards and sorcerers. She was a single mom, depressed and receiving public assistance when she finished writing the book that was to start her on the road to success, "Harry Potter and the Sorcerer's Stone."
In a commencement speech that she gave to the Harvard graduating class of 2008, Rowling talked about the benefits of failure: "Failure meant a stripping away of the inessential. I stopped pretending to myself that I was anything other than what I was, and began to direct all my energy into finishing the only work that mattered to me."
When it comes to our credit history, many of us have suffered through bumps in the road. These "failures" are nothing to be embarrassed about. Life happens... people lose jobs, get divorced, suffer from a medical crisis, and oftentimes get behind on their bills as a result.
The good news? Each of us has the capacity to reinvent ourselves when it comes to credit. Like J.K. Rowling, all that we need to do is stop pretending. Stop pretending that our credit is really "okay" or that we don't mind having to pay for all of our purchases with cash. Stop pretending that we don't mind being unable to obtain mortgage financing for a home.
How is this reinvention possible? Your credit score is forward-looking. This means that no matter what your credit score and history looks like today, you can learn and use smart and informed financial management tools to turn your credit score in a positive direction. If you are unhappy with where your credit score presently is, you don't have to let it stay there.
This is not to say that mistakes you made in the past will immediately go away. Surprisingly, more often than not, old accounts that are in collection or for which you have been sued and have become court judgments don't really impact your credit score. They will, however, serve as roadblocks to obtaining certain financing (like for a home or auto.)
Over time, your old mistakes will impact your score less and less. When the majority of the negative items on your credit report become seven years old, they "age off" of your credit report. Federal law (The Fair Credit Reporting Act) requires that the credit bureaus reporting those old items discontinue doing so.
So, quit pretending that your credit score cannot be made stronger. Quit pretending that there is nothing you can do about it. The first step towards reforming your credit score is to obtain and review a copy of your credit report. Don't procrastinate, get it today. You are entitled, by law, to a free copy of your credit report once a year (you can get it on the internet, where you're reading this article, at sites like annualcreditreport.com.)
You need to have accurate, complete information about your credit history, so it's crucial that you obtain copies of your credit report from all three of the credit reporting bureaus. (Transunion, Equifax and Experian) You need all three in order to ensure that your credit picture is complete. Oftentimes items reported by one of these bureaus may not be reported by one or both of the other bureaus.
You can attempt to fix damaged credit issues on your own. After all, you tell yourself, "I got myself in this place, I'll get myself out." However, the process of reinventing your score can involve hard work. It will require your time, patience, diligence and perhaps some aptitude for understanding what the credit bureaus and collection agencies are required by law to do.
You may want to consider enlisting the help of a professional, reputable credit restoration company to help you with your credit makeover. A well-qualified credit restoration company will provide you with important guidance as to how to address negative items that appear on your credit report, help you to maximize your credit utilization, teach you how to acquire and properly utilize a secured credit card, and help you with negotiating collection accounts.
Perhaps most importantly, a good credit restoration company will help you do this without judging you. No matter how bad you think that your credit history is, they have likely seen worse.
An important caveat: Beware any credit company that tells you that the process is going to "be easy", that "guarantees" that they can remove accurate information from your credit report or pitches crazy schemes like attempting to change your social security number. There are scam artists in every industry, so do your homework before hiring any company to assist you with this "life changing" project.
The bottom line: Your credit score, while essential, doesn't define you. You have the ability to control your credit score and you have the ability to move past the bumps in the road. Whether you do it on your own or enlist the assistance of good credit restoration company, there is no better time to start than today. Follow the advice of the creator of Hogwarts: stop pretending your credit is anything other than what it is, strip away the inessential and direct your energy towards improving your credit. It matters, significantly, to you and to your family.