Creditors in Your Closet

Let this debt-management plan rescue you from a haunted past

It was in Tan Goodjiones’ senior year at Atlanta’s Morris Brown College in 1983 that the high-interest department-store credit cards started pouring in. She received Macy’s, J.C. Penney, and Sears cards. Even a Rhodes Furniture card came in the mail, although she lived in the dormitory and did not need it. She happily, and nonchalantly, ran all of her credit cards up to their limits. Although Goodjiones worked, she earned minimum wage working for merely 10 hours per week in her college’s work-study program.

“Due to youth and immaturity, I felt that I could pay my bills when I got ready. If the minimum due was $20, I would pay half that or nothing at all–not realizing there was such a thing as a credit report,” says Goodjiones, now a counselor for Brown’s Mill and Dunaire Elementary Schools in DeKalb County, Georgia. “At one point, when my friends and I ‘maxed out’ one of our credit cards, we just threw it in the trash.”

Upon graduating from college, Goodjiones proceeded to acquire additional debt with other credit cards at Rich’s and Bloomingdale’s department stores. According to Myvesta.org (formerly Debt Counselors of America), a nonprofit financial service organization, the youthful Goodjiones was hardly alone. Its November 2000 Credit Card Survey revealed that the average 18- to 24-year-old owes $827 on two credit cards.

Goodjiones never realized the ramification of having negative credit until nearly a decade later when she attempted to get a major credit card in 1992 and was turned down. Soon after, she inquired about purchasing a home and was informed that she didn’t qualify because of her credit rating.

She finally internalized and understood the magnitude of her youthful mistake.

“I felt like the system was to blame for marketing to college students who barely know how to handle their own personal lives,” Goodjiones contends. “It was a struggle to get past that. I thought, ‘Now I know what to do. Can I get another chance?’”

Her question is one that many consumers find themselves asking as a result of being plagued by similar debt issues. Whether you have a negative credit report because you “maxed out” your credit cards during your college days, or you had your home foreclosed, or your car repossessed, or you are currently in arrears on your student loans–you no longer have to be haunted by the creditors in your closet. We’ve polled experts in credit counseling organizations and companies that extend credit to consumers for answers on how you can face your past and address your former credit mistakes so you can make major purchases, such as a home and a car in the near future. Here’s what they suggest:

OWN UP TO YOUR MISTAKES
By now, you’ve probably found out that you can’t keep hiding from your past. Admitting that you have a problem is the first step toward making a change. After coming to terms with your credit problems, you should be proactive. Search the Internet for articles on credit repair and read books, such as Mary

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