Until four years ago, I thought my identification was limited to my name and address, and to a certain extent my education or job. That was before I landed myself in a bit of a pickle as a result of job loss and the current economic conditions. Debt is tough, but it made me realise who my real friends are.
The UK can have debt amounting to £2.77 trillion, but I, just one simple girl, cannot owe £89,000 and a few default payments without getting hounded by debt settlement agents and red notices. Not to mention being ostracised by everyone around me.
Today, I am debt-free and the journey has been nothing short of an adventure, but my experience can prove to be an example for others who are in the same boat as I was. From a credit score of 320 on Equifax to now, completely debt free, this is my story…
I Was Almost Homeless
I had company-appointed accommodation in London and when I lost my job in 2020, I was rendered homeless. Renting isn’t easy when you are broke, jobless and have a bad credit score. Like many others, I didn’t know that. Property owners usually conduct a background check to see if you are the ideal tenant or not. Apparently it doesn’t matter if you can pay the deposit or the rent as failing the background check, which involves a look at your credit history, means you can be denied rent.
After staying on a friend’s couch for a few weeks, I moved back to my old bedroom in my parent’s house.
My Mental Health Was Low
It is not easy dealing with debt. At 29, I didn’t want to ask my parents for money, nor did I want to spend my days in pyjamas and sleeping in my childhood bedroom. Frustratingly I was stuck with no choice but to do all of the above. Why? Because I made some bad financial decisions and inflation is unforgiving.
I refused to come down for meals, go to Church on Sunday or even take calls from friends – social isolation felt like a “safe” cocoon. Applying for jobs and taking calls from credit card companies added to my stress and anxiety, leading to insomnia. All of these factors aggravated my mental health and as a result, my physical health tanked too.
Insurance Premium Skyrocketed Without Any Claims
My car was lying in the garage and yet, when it was time for my insurance renewal, my premium had
skyrocketed. I’m not a bad driver, I was just a car owner with a bad credit history. This made me a risky customer, especially since I wanted to pay my car insurance premium on a monthly basis. The interest on the instalments was extremely high, even more so than my elderly father’s.
I Was Paying More Interest For My Loans
My ordeal didn’t end with the repayment of dues and debt settlement. Being on the verge of bankruptcy can lead to significant damage for the many years following.
When I finally managed to land a job (more on that in the next section), I had to move to London once again. With just a few hundred quid in my bank account, I had to resort to payday loans to pay for my expenses until my next paycheck. Finding a lender that was offering a moderate APR was yet another challenge. I looked through multiple bad credit payday loan providers to find the best rate and thankfully found one that suited me. Luckily I’ve learnt from previous mistakes and no longer borrow from the first lender that I come across.
I Was Denied Jobs, But Not Because of My Qualifications
When interviewing for jobs, I was often denied an offer letter because they discovered I was financially insolvent and had a bad credit history. You would think having the right qualifications, experience and communication skills were enough to get hired.
While I was angry initially, I came to realise that this was a legitimate concern for my potential employer. Someone who is in debt might get tempted to act immorally, take a bribe, pocket money from the cash drawer or sell company secrets.
Wrapping Up
Like everything else in life, debt and bad credit scores pass. You just need to be mindful of your spending habits and take proactive measures to build your credit score back. To this, you can spend on your credit card to pay for your daily needs and then pay it all back by the end of the month. This will prevent you from acquiring interest and fines while improving your credit score.
Thankfully, my relationship with money has undergone a massive change since. I treat my income with utmost respect, read up on the latest investment and saving schemes and always think twice before making a purchase. Being in debt is bad but what is worse is how it changes your opportunities and also the way people perceive you.
While wallowing in self-pity isn’t a solution, learning from your past mistakes and not making them in the future will help you lead a financially secure life.
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