A client was in my office recently and expressed her desire to make positive changes with her credit. Like many people, she was particularly motivated by a big change in her life — the possibility of buying a new house. She knew that changing her credit habits could result in boosting her credit score, which would allow her to potentially get a mortgage for a bigger house with a lower down payment at a lower rate of interest.
But she was stuck. And that was why she had contacted me. Sure, she knew what she wanted, but she was struggling to move forward. For her, and for many other people I’ve seen, there is a struggle to have a positive impact on credit. Perhaps you want to see positive credit changes in your life but something is holding you back.
I believe the problem is fear. I commonly see the following fears rising to the surface when someone starts to look more closely at their credit.
Fear of Failure
What if you try to make changes to your credit and you can’t make those changes in time? The perfect house might slip through your fingers and you’ll be stuck living in the apartment above the brass band that likes to practice at 3 a.m.
Fear of the Unknown
Credit reports and credit scores can seem confusing and mysterious, making it a challenge to know how to start. What if we start in one place but end up having to backtrack? What if we make changes on the wrong thing?
Fear of Work
We might be willing to take on the challenge of looking at our credit… until those thick, confusing credit reports show up in the mail. Then the daunting reality hits that this isn’t something we can do during the commercial breaks of “Real Housewives of Atlanta”!
Fear of Embarrassment
Pulling those credit reports can be a harsh reminder of some of our unwise moments in life. That zany weekend in Vegas when we maxed out the credit card or that time we co-signed a loan for a now-long-gone boyfriend or girlfriend. Old addresses, old debt collections, closed accounts… they are all signposts to a past that we don’t always want to remember.
I wish I could wave my magic wand and eliminate these fears. But I can’t. Instead, I can only give you the same advice I share with my friends and clients who are struggling with the same barriers:
Your credit reports and credit scores are not “you.” They are an indicator of choices you’ve made in the past and they are a tool to help you build a new future. Fortunately, you are always evolving and improving, so embrace your fears, learn to master your credit (even if it seems confusing at first) and use your credit report as a springboard to a better and brighter future.
By regularly checking your credit reports (which you can get for free from each of the three major credit bureaus once a year) and your credit score (which you can get for free once a month from Credit.com), you can get a solid idea of how to tackle your credit problems and build a better financial life for yourself.