The Financial Game: Click here
The Financial Game: Click here
Date Published: 3/01/2022
Some years ago, my wife and I had two rental properties out of state. Unfortunately, we lost both properties in 2008 when the real estate bubble burst. Our credit rating tanked as a result of losing these properties.
Like many suffering from bad credit, I couldn't buy anything without being penalized with high-interest payments. For instance, I applied for a new car and never received a callback. When I reached out to the finance company, the representative informed me that my credit was 510, and they couldn't help me. I felt helpless.
Instead of accepting defeat, I called a friend that worked in the banking industry and told her my situation. She instructed me to set up a secured credit card. She also told me that when I received the card and started using it, I should ensure the balance never exceeded 40 percent.
I took her advice, went to my bank, and set up a secured credit card with a balance of $300.
I used her simple strategy, and after eighteen months, something happened.
One day, I checked online and noticed an extra $300 was in my account. Since I hadn't made a deposit, I called my bank, and they informed me that it was a refund from my secured credit card, and a correspondent with an explanation would follow. Within a couple of days, I received a letter explaining that the $300 deposit I used to set up the account was refunded. Furthermore, my credit card account is now unsecured but secured.
Instead of going on a shopping spree, I use our good credit to refinance our home mortgage. As a result, we reduced the loan duration from 19 to 10 years, saving us 60k - 80k over the life of the loan.
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