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Bad financial situations can happen to anyone –even those who watch their budget carefully. Instances like a medical emergency or adding a new member to your family can drain your savings and drive you into debt. Such was the case with Shenil Walker.
Shenil Walker was denied health coverage when she was pregnant due to pre-existing conditions. She did qualify for the government-run health plan, Pre-Existing Condition Insurance Plan (PCIP). Even though herrom the hospital. She was not even aware that there were several debts in collection until she viewed her credit report. A year after her delivery date, she had five collection accounts on her report from the hospital and another collection account from the anesthesiologist that administered her epidural.
Talking with the insurance company was not an option, since the Affordable Health Care Act made PCIP insurance obsolete, and the insurance company was no longer in business. “I was totally hopeless,” Walker says. “But determined to get this corrected.”
How Credit Sesame Helped
All of the issues with the insurance company and hospital left Walker with a lot of debt and a credit score in the 500’s. With a score in the 500s, buying a family vehicle or a home at a low interest rate is impossible. Knowing this, Walker set goals. “I was determined to get the car of my dreams,” Walker says. “During this process, I printed out the car brochure from the dealership's website and told myself, “I'm going to get this car by September of next year.”
Walker then set to work and researched which credit score she would need to get the car loan, as well as other loans and lines of credit. She realized should would have to raise her score 200 points to get the best rate. She set that number as her goal. “My goals helped me succeed because they were measurable and they held me accountable.”
Walker used Credit Sesame’s report card style grading system to understand what she had to focus on. Credit Sesame grades users on the top factors that determine credit score, such as:
- Payment History
- Credit Usage/ Credit Utilization Rate
- Credit Age
- Account Mix
- Credit Inquiries
“I had no idea what my credit score was made up of prior to that,” says Walker. “The report card really helped me identify the factors that impacted my score the most and target the factors that needed the most improvement.” Knowing how you score in each area helps you see which factors are bringing your credit score down. For example, if you had a "C" for credit usage, you would be able to determine that you needed to either decrease your debt or increase your credit limit to lower your credit utilization rate.
For example, having only $500 in debt isn’t a lot, but if you have only $1,000 in total credit lines available, your credit utilization rate will be 50 percent, which is very high. Paying off $300 of your debt or increasing your credit line to $2,500 would decrease your utilization rate to 20 percent and raise your overall credit score.
Other Steps Walker Took to Fix Her Credit
Alongside the regular use of Credit Sesame, Walker did some research on medical collections. She discovered that non-profit hospitals have charity care programs. She was approved for the charity care program, which paid the medical bills and got the collections off of her credit report.
Even though Walker’s report was scrubbed clean of the collection accounts, she still had to spend time rebuilding her credit. She started with a Wells Fargo secured credit card and managed it responsibly for six months. Wells Fargo upgraded the card to a Platinum unsecured card.
Walker’s mother-in-law also added her as an authorized user to all of her credit cards. Once Walker’s mother-in-law paid off her large balances, Walker’s score went up 100 points. All of this was done while regularly checking Credit Sesame to ensure she was on the right path.
A Better Credit Score Can Make Dreams Come True
Walker started her journey to improve her credit score in November 2015. She was able to purchase her dream car on September 29, 2016 – a huge accomplishment for a new mom who initially didn’t know how to deal with all six medical collection accounts. “My life has changed so much because now I am not afraid to apply for credit, but am confident that I will be approved,” explains Walker. Now Walker qualifies for better credit card offers and was recently pre-qualified for a home loan.
Improving your credit score and getting your finances in control is hard work, especially when your bad financial problems happen to you through no fault of your own. When asked about improving her credit score, Walker shared, “It takes diligence and patience, but it can be done! You just have to educate yourself, and Credit Sesame is a wonderful tool.”
Find out more on how Credit Sesame can help you track your credit score here.