Author: Holly Johnson / Source: Wise Bread
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Please visit our Advertiser Disclosure to view our partners, and for additional details.Credit mistakes don’t have to leave you with poor credit for the rest of your life. Other people have overcome their credit problems, and so have I. You can do the same, with a little bit of time and patience.
When I was in my early 20s, I made a lot of unfortunate financial decisions that cost me both time and money. One of those decisions, which I still regret to this day, was the purchase of a new (read: expensive) car when I made less than $10 per hour.
I’m not sure why I thought I could swing the car’s ridiculous monthly payments, or if I even cared how the purchase might impact my other financial goals. Heck, I’m not even sure I had financial goals. I wanted a new Mitsubishi Galant, apparently at all costs, so I did what I had to do. And boy, did I pay for it.
Over the years, that car held me back in a huge way. While I kept up with the $500+ payments because I always had a job, I ultimately had to move back in with my parents to focus on repaying my car loan.
I eventually paid off that car and vowed never to take out a car loan again. The entire experience was painful, but it also taught me something I probably needed to learn the hard way: Mistakes can be overcome if you don’t let them take over your life.
I bought an overly expensive car for sure, but I didn’t let that ruin my credit for good. Instead, I fixed my mistake, slowly but surely, by doing the right thing.More proof that credit mistakes can be overcome
I’m not the only one. Over time, many financial experts have made credit mistakes they’ve had to mend one way or another. Fortunately, this means that you, too, can fix your credit snafus if you apply logic to your mistakes and take actionable steps to remedy them.
If your credit is suffering for any reason, it’s possible to get on the right track to fix it this year. Here are some of the mistakes you may have made, plus the best ways to move forward.
Paying interest on a rewards credit card
Earning credit card rewards can be advantageous if you are able to use credit cards without getting into debt. But what happens when you pursue rewards without a plan to pay off your balance immediately?
Deacon Hayes, founder of the Well Kept Wallet blog, found out exactly what happens the hard way. When he and his wife were married, they put their honeymoon on a credit card in order to rack up cash-back rewards. They had a great trip, he says, but they ended up paying a lot more in interest than the paltry 1%-2% cash back they earned. Why? Because it took them months to pay off their honeymoon…
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