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I’ll never forget the time I visited my local payday loan store because I had no credit card or savings to buy gas and groceries. I wrote a check for $60, and the clerk handed over $50. Then I slinked out in shame, praying that no one I knew would drive past.
Payday loans are a bad idea, and you can become ensnared in debt, so I’m not recommending payday loans. I’m just showing you what your options are when you have crappy credit.
When I was in my twenties, I wasn’t good with money and had a low-paying job, which led to past-due payments, a defaulted student loan and a poor credit score. However, over the course of a few years, I improved my credit. As a result, my life improved significantly. Yours can too, even if you’re at a point where only a loan shark would extend a high-interest hand. An easy way to start building your credit score is to open a credit builder account like Self Lender.
Paying off debt and improving your credit isn’t “simple,” as I read recently on one personal finance site. Still, once you gain momentum, it becomes easier as you watch your debt go down while your credit score rises. Then life starts getting better.
Here are seven ways your life can improve once you start taking your credit seriously.
1. Goals become attainable
Before I fixed my credit, I had goals I couldn’t attain. I wanted to go back to school and get an English or journalism degree but couldn’t afford tuition. I also couldn’t get student loans because I’d defaulted on my previous loan. So, I set up a payment plan that took my loan out of default after six months of payments. Then I returned to school for the college degree that I needed to get a writing job. Suddenly, I had a purpose and an achievable goal.
2. You can tap credit for emergencies
When your emergency savings account dwindles, or you have an unexpected expense that must be paid immediately, good credit can be your safety net. When I needed a new air conditioner system five years ago, I didn’t have $3,000 on hand. However, excellent credit allowed me to finance for 18 months at 0 percent interest, and I paid off the loan within a year. Without good credit, I could have been sucked into a terrible loan arrangement for thousands of dollars more.
3. No more debt-induced anxiety
I used to be so stressed from trying to keep track of multiple payment due dates. Occasionally, I’d miss one, which led to late fees and a big dose of debt shame. Once you devise a plan and create a budget to begin reducing your debt, you’ll have fewer deadlines cropping up each month. With each debt you pay off, you’ll feel lighter.
4. You can become a homeowner
At one point, I simply accepted that I’d never be able to buy a house. Then I paid off my debt, fixed my credit and saved money for a down payment. Now, my home will be paid off in seven years, if not sooner. If you want to purchase real estate, you’ll need good credit. Don’t be put off by how long it might take to improve your credit score. The years will pass whether you work on your credit or not. Here’s how to take your first steps to get out of debt.
5. Landlords will rent to you
If you have bad credit, your application will probably be denied by landlords, forcing you to choose an apartment or rental home in a less desirable neighborhood. Fixing your credit opens housing options.
6. You’ll feel like an adult
Now that I have good credit, I have my choice of car loan options, and I’m easily approved for credit cards and loans. After you improve your credit, you’ll have access to the same options that all your friends use to run up their debt. But you’ll be smarter than that because you dug yourself out of the terrible credit trenches.
7. You’ll have more self-respect
In addition to my payday loan low point, I had an abundance of shameful moments being denied for credit cards and loans. I felt like a failure, unable to buy a home, car or get a credit card. Now I know I can handle the expenses of adulthood. You can too, so take control of your finances and get started paying off that debt.
Your days of feeling like a second-class citizen can be over if you’re patient and persistent. So, tally up your debt and put together a budget. Before long, your life and the way you see yourself will improve, along with your credit score.
Originally published at www.debt.com on May 8, 2018.