Debrief of Expert Presenter (Credit)


Background

The presenter is a credit counselor presenting credit management material to a first year undergraduate class within the subtopic of managing personal finance. The student was awarded two participation points for his submission.

The Learning Narrative

I don't know how many of my classmates have encountered the realities of a bad credit rating, so I thought I'd pass on a 'personal experience' message.

I wasn't screwed around by a credit bureau mistake. I made all the right moves to get myself in trouble! I knew it was a good idea to get a credit card to create a rating for future plans. To limit the damage I could do to myself, I picked a fuel company. At the time my summer job required me to drive 500-100 kilometers per week. What better way to manage the bills than put gas purchases on one card. No problems with this idea until I went back to school got the education and living bills paid off, found I had no dollars left but still had the left-over balance on that card.

This card eventually went to collection. At that point, I really didn't understand the impact this might have on me. I finally got it all paid off, but didn't think too much of it.

Fast forward 4 years from my mistake (which is how I view it). I've been working full time for the same company and have a transferred to Nova Scotia. The job still requires me to drive 500-1000 kilometer a week (that hasn't changed!) After one month here I realized my beat-up gas guzzling truck would not cut it. Time to go shopping for a car. "This should be easy" I thought to myself, though I knew I didn't have a current credit rating. Two years of employment with a decent company, money in the bank - banks should be happy giving me a loan.

Well, they might have been, except the mistake I made with the fuel card still showed on my record. No bank would accept the risk, nor would a dealer financing group. I knew I could not wait the additional two years required for the credit history to clear, so I ended up getting (almost begging) family to co-sign the purchase.

Jim's presentation reinforced what I already knew. It takes a heck of a long time for a credit issue to clear off the books (6 years for bad debt). During that time you really can't go forward with any plans that might involve credit. When you are early in your life, access to car or business/entrepreneur loans might be the only way to get started. You certainly don't want your grand plans fouled up by something you have the power to control!

I still own that car, in fact, paid for it in 4 years. However, even after the loan was cleared, there were entries (though not negative) on my credit history as well as my co-signers. This impacted that person's ability to secure a mortgage. It took some fast phone calls to clear it up.

That particular issue increased the value of Ed and Jim's statement about checking your credit information regularly. I still haven't done it, since I didn't have the tools until I started this class. Needless to say, I'm in the process of mailing the requests out now!
It was a frustrating time when I had the credit problem hanging over me. However, now that things are on track for me financially, I do look back at that experience as one of the better things that happened to me. It forced me to monitor my finances better, taught me how to save/plan for larger purchases and made me very aware of the requirements a financial institution has when you approach them for any lending requests.