Not everything that comes with a good credit score is obvious.

3 minute read

When I was in my twenties, I wasn’t good with money and had a low-paying job, which led to past-due payments, a defaulted student loan, and a poor credit score. However, over the course of a few years, I improved my credit. As a result, my life improved significantly.

Paying off debt and improving your credit isn’t “simple,” as I read recently on one personal finance site. Still, once you gain momentum, it becomes easier as you watch your debt go down while your credit score rises. Then life starts getting better. Here’s what fixing bad credit can do for you…

Click here to sign up for our free financial education email course.

1. Goals become attainable

Before I fixed my credit, I had goals I couldn’t attain. I wanted to go back to school and get an English or journalism degree but couldn’t afford tuition. I also couldn’t get student loans because I’d defaulted on my previous loan.
So, I set up a payment plan that took my loan out of default after six months of payments. Then I returned to school for the college degree that I needed to get a writing job. Suddenly, I had a purpose and an achievable goal.

2. You can tap credit for emergencies

When your emergency savings account dwindles, or you have an unexpected expense that must be paid immediately, good credit can be your safety net. When I needed a new air conditioner system five years ago, I didn’t have $3,000 on hand.
However, excellent credit allowed me to finance for 18 months at 0 percent interest, and I paid off the loan within a year. Without good credit, I could have been sucked into a terrible loan arrangement for thousands of dollars more.

3. No more debt-induced anxiety

I used to be so stressed from trying to keep track of multiple payment due dates. Occasionally, I’d miss one, which led to late fees and a big dose of debt shame.
Once you devise a plan and create a budget to begin reducing your debt, you’ll have fewer deadlines cropping up each month. With each debt you pay off, you’ll feel lighter.

4. You can become a homeowner

At one point, I simply accepted that I’d never be able to buy a house. Then I paid off my debt, fixed my credit and saved money for a down payment.

Now, my home will be paid off in seven years, if not sooner. If you want to purchase real estate, you’ll need good credit. Don’t be put off by how long it might take to improve your credit score. The years will pass whether you work on your credit or not.

Find out: 10 Steps to Take Control of Your Finances.

5. Landlords will rent to you

If you have bad credit, your application will probably be denied by landlords, forcing you to choose an apartment or rental home in a less desirable neighborhood. Fixing your credit opens housing options.

6. You’ll feel like an adult

Now that I have good credit, I have my choice of car loan options, and I’m easily approved for credit cards and loans. After you improve your credit, you’ll have access to the same options that all your friends use to run up their debt. But you’ll be smarter than that because you dug yourself out of the terrible credit trenches.

7. You’ll have more self-respect

In addition to my payday loan low point, I had an abundance of shameful moments being denied for credit cards and loans. I felt like a failure, unable to buy a home, car or get a credit card. Now I know I can handle the expenses of adulthood. You can too, so take control of your finances and get started paying off that debt.
Your days of feeling like a second-class citizen can be over if you’re patient and persistent. So, tally up your debt and put together a budget. Before long, your life and the way you see yourself will improve, along with your credit score.
Did we provide the information you needed? If not let us know and we’ll improve this page.
Let us know if you liked the post. That’s the only way we can improve.
Yes
No

About the Author

Deb Hipp

Deb Hipp

Deb Hipp is a full-time freelance writer based in Kansas City, Mo. Deb went from being unable to get approved for a credit card or loan 20 years ago to having excellent credit today and becoming a homeowner. Deb learned her lessons about money the hard way. Now she wants to share them to help you pay down debt, fix your credit and quit being broke all the time. Deb's personal finance and credit articles have been published at Credit Karma and The Huffington Post.

Published by Debt.com, LLC