Budgeting & Saving

How I Destroyed My Credit (And What I Did to Turn Things Around)

Financial blogger Ash Cash shares his own personal story of early credit missteps - and how the hard truth found him. Learn how he saw the light and started making progress toward responsible financial goals.

They say that experience is the best teacher. When it comes to credit, that's been true for me.

Today, I'm an established banking professional and personal finance expert who understands credit and how it works. And while my business experience has developed this knowledge, my early personal struggles with credit help remind me how painful it feels to be facing credit problems firsthand.

An Unwise Decision

At 18 years of age and still living with my mother in a small two-bedroom apartment, I used credit irresponsibly. Since I didn't learn about credit or personal finances in school, I treated credit cards as if they were free money. My credit score, and ability to obtain credit, plummeted when I purchased things that I really didn't need — and couldn't afford.

Big Spender

My first blunder was buying a 40-inch TV and a DVD player with surround sound (back when DVD players were new and expensive) all on credit and with no plan for paying it back. Let's just say that I used this setup to entertain my friends in my way-too-small bedroom in my mother's way-too-small apartment. The irresponsibility cost me dearly. By 21, my credit was shot — so much so that I couldn't even get approved for a department store credit card. My first car had to be leased in the name of my girlfriend (who, by the way, is now my wife). When it was time to get an apartment, we had to leave my name off the application so we wouldn't get declined.

Turning It Around

After the embarrassment that came along with not having good credit (and with pressure from my wife) I knew I had to make big changes. By changing how I dealt with my debt I became a homeowner by 25 and was finally able to obtain financing for a car on my own, get a major credit card with a high limit, and begin receiving daily credit offers.

By using secure credit cards, keeping my credit card balances low, and focusing on paying my bills on time, I was able to rebound from my earlier mistakes. I also made sure to not close any credit card accounts that had a good history, and I applied for additional credit only as I needed it. I saw a big jump in my score and found myself on a path to financial freedom.

Now, I'm proud to be reminded of my bad credit experiences because without them, I wouldn't know what to do to get back on the right track. And I can truly understand those who find themselves in that position today.

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Experian.