Creditors in Your Closet

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

Hunt’s Debt Proof Living: The Complete Guide to Living Financially Free (Broadman & Holman Publishers, $14.99), for suggestions. Also get in the habit of opening your mail and answering your phone–even when you know it’s related to a bill. The only way you can start repaying some of your creditors is to know what you owe.

Although Goodjiones mistakenly avoided seeking advice from a financial advisor because she feared the expense, she still conducted her own research. “I realized I needed access to self-help literature,” she says. “So I went to the library to do research, read money management magazines such as BLACK ENTERPRISE, and joined an investment club.”

As our experts stated in Part 1 of this series, every consumer should order a copy of his or her credit report at least once a year. You can call, write, or go online to the three major credit bureaus (see “Creepin’ Credit Errors,” September 2001).

“Be in control of the situation. Get a new credit report several months before you apply for credit and know what it looks like. That will give you equal footing with the lenders,” says Rod Griffin, manager of public affairs for Experian. “Talk to various lenders and get rates. Don’t apply at that point. Get pre-qualified, as opposed to pre-approved. The process is less complicated and gives you an idea of what your interest rates will be.”

Goodjiones soon learned that paying the minimum on the credit cards she did manage to obtain was getting her nowhere fast. She took large portions of her paychecks and IRS returns to pay off and to close each of her credit cards. Soon afterward, she was debt-free. She currently has a single VISA credit card, a brand new 1999 Toyota Camry, and the beautiful home that she’s always wanted in the King’s Glen subdivision of Decatur–all at the prime interest rate.

As with Goodjiones, you must bring all of your late payments up to date if you want to establish a positive credit history. This requires that you continue to make timely payments on your monthly accounts and pay off your delinquent debts. “The good news is, just because you have negative credit on your report, such as a repossession, doesn’t mean you’re a horrible risk,” assures Griffin. “Lenders do look at the amount of time that has passed since you had late accounts. While your credit report is not perfect, that doesn’t mean that you will not get credit.”

According to the National Foundation for Credit Card Counseling (NFCC;, 1.3 million American families filed for personal bankruptcy in 1999. Do not pre-judge your credit. Before taking the drastic step of filing bankruptcy, seek the counsel of hordes of consumer assistance organizations that can help you lower your debt and reclaim control of your own financial destiny.

The Consumer Credit Counseling Service (CCCS; offers consumers free counseling sessions in person that include how to reduce spending, use credit wisely, manage money, build a savings

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