Credit Suicide

I saw a video this morning on YouTube, I think the channel is called The Credit Game. Anyway, the topic was having collections debt, and why you shouldn’t pay collections. I already do not pay a lot of stuff, including debt in collections, but not because I’m smart. I’ve already confirmed my identity with these companies and in some cases made small payments. If only this were the worst mistake I’ve made to my credit.

Like many people, (many more than will probably admit), I have a long history of substance dependence and abuse, and like so many others, it has destroyed my credit. Largely because when you live in a surreal world thinking insane thoughts all the time, some of your decision making is…less than ideal.

Here are some of the things that I’ve done to destroy my credit.

1 - Didn’t pay a $14 utility bill for almost 3 years. The damage this did was unbelievable, and trust me, a phone call suggesting they drop the charge because “$14 won’t make or break your business” doesn’t work. I’m not even sure how well that approach works for debt collection calls anymore. Probably not very.

2 - Cancelled $6000 worth of credit lines. At the time I figured, I was so broke that I might never pay anything down, I actually cancelled 2 out of my 3 credit card accounts. Now that they’re paid off, I am heavily regretting this decision. You see, the amount of credit you have available weighs into your credit score. So that $400 in unpaid credit card debt that seems like NBD suddenly becomes a lot more significant when it’s 40% of your total available credit.

That’s not to say it was the worst decision. I could see myself at one point perhaps having made a large random payment then immediately max’ing out the account again. However, in the long term with all other things remaining equal, that still would have been better than closing the accounts. Hindsight is 20/20.

3 - Made very random large payments. This doesn’t help as much as you might think. Certainly it does help, but making regular monthly payments is also extremely important it would seem. The smart approach would have been to just forget I had $500 to put towards the card (for $2.49 you can forget anything for a while) would have been to just put it into the bank and set up automatic deductions for $50-100 a month. Something to make a small dent after interest. Of course when your minimum payment is $247, it certainly feels like an impossible battle.

4 - Having debt go into collections at all. Would have saved a lot of time and trouble if I had just prevented this from happening. Sometimes a phone call is enough to prevent late charges and other penalties. I managed to do this with early on in my addiction, but after paying off my mortgage and getting used to having what felt like a bottomless wallet, I just kind of gave up trying.

“Hey bro, that’s cool and all, but I’m not an addict.” Good point, friend…so what’s your excuse for having debt in collections? “I can’t help it I couldn’t afford to pay blah blah “ Did you call and talk to someone at your lending company to talk about it? Maybe try back and ask for a supervisor if your initial call was unproductive? “Well, no, but…that doesn’t matter, what can they do?” You’d be surprised at the power of phone calls. And sometimes sheer dumb luck. We all know what Wayne Gretzky would say.

You miss 100% of the shots you don’t take.

Try taking a shot at this, it’s an e-book on debt management (I think. I just want your 2.3cents, lulz)