Readers tell their credit horror stories

Readers tell their credit horror stories

Some blunders come back to haunt in scary ways. Here are 8 ways people have screwed up their credit records.


Many people who have had painful credit experiences have written to share their credit blunders. The following are their real-life stories -- and examples of what not to do. And, ouch! Some of these stories are doozies.

Co-signed loan for beau's brother
My biggest mistake was to co-sign a student loan for my ex-boyfriend's younger brother. I have a problem saying no to people that I feel have been dealt a bad hand in life. I felt sorry for him because his family couldn't and wouldn't help him, and I knew he really wanted to go to school. I thought it was a good thing and that he was on the right path with the right mindset. I wanted to believe in him.

It turns out that he made me sign for two loans, not one like he told me. He had me sign the second loan by saying that the school lost the original papers and he had to resubmit the paperwork. Being the naive and trusting fool that I am, I believed him. Turns out he dropped out of school shortly after starting, and didn't give the school any notice so they could refund part of the money. He owed the creditor the full loan amount of almost $9,000. He did not make any payments for almost four years after dropping out -- which, after fees, increased the amount owed to over $13,000.

Now, years later, and after numerous phone calls, false promises, pleas and threats, he has finally made a deal with them to make three monthly payments for a reduced amount agreed upon. He could not come up with the second month's payment so I had to borrow from my credit card in order to help out, in the hopes that I can salvage what's left of my nonexistent credit after this is done with. He claims he will pay me back, but I won't hold my breath.

      --Amina A.
      See Why you should never co-sign a loan

My mom and a timeshare
My 50-something, widowed mom got lured into buying a timeshare with a friend. They thought the timeshare was an investment; but by the time they found out that it was a deal coming straight from Hades, it was too late for them to back out. Her "friend" stopped paying, and now mom is stuck paying the fees herself.

When she's late with her payment, the timeshare people threaten her. They've actually called and asked me for her work number. My mom is feeling depressed and low -- even though she hasn't ever used or taken advantage of the sorry deal. She has barely enough money to buy food, pay her mortgage, and other bills.

I know it was a big mistake for her to get this timeshare, and I have been helping her as much as I am able financially. But I just wish that these timeshare demonic collectors would stop treating my mom like dirt.

      --Irritated Child

Run the numbers before you buy a car
In summer of 1996, I went to a Mazda dealership. I bought the equivalent of a Ford Escort for $17,000 at 19%. The payments were $419 per month. The insurance was as rude as the payment.

The moral is: First shop for insurance, and then look at the car. Decide if the vehicle is really worth it and if you can live with a used or less expensive ride. Ask yourself, "Did I work as hard spending this money as I did earning it?"

      --Regretful buyer
      See the Best deals on four wheels Decision Center

In the beginning
The worst credit mistake I ever made was getting a credit card to begin with. The best credit move I've ever made was closing my two credit card accounts a year and a half ago (totaling $12,000). I now have my balance down to about $4,500.

      --Derek B.
      See 10 steps to debt freedom
      (Editor's note: Because credit card companies will raise your rate if you cancel a card, it is best to keep the accounts open until you pay them off.)

Why available credit is important
When my credit limit reached $70,000 I reasoned I didn't need that much credit. My highest balance had been $15,000 and I was uncomfortable owing that much. So I called my creditors and had them lower my credit limits, which they had trouble understanding at first. What a mistake.

Later, when I encountered over $12,000 in legal fees and another $10,000 in other expenses, I was $33,000 in debt with only $40,000 in available credit. I quickly lost another $10,000 in available credit when I had to close three accounts after the credit card companies changed terms and raised the interest rates due to my high debt ratio.

If I had kept my high credit limits, $33,000 debt probably wouldn't have caused a chain reaction of changes in terms with the credit cards. My debt ratio would have been less than 50% and wouldn't have been seen as a problem.

The lesson I learned is that available credit is a good thing. The more the better.

      --Verne S.
      See the Maximize your credit rating Decision Center.

The sting of credit cards
It was my first year of college and I had it all -- my own room, freedom, and the experience to travel. It didn't take long before the big credit card companies set up a booth in the lobby of our cafeteria and convinced everyone that all you had to do was sign up to get the free T-shirts displayed on the tables. I didn't think anything of it at first. I mean what harm could it do, right? Wrong.

Before I knew it, the T-shirt was buried beneath the many clothes that I had bought with what my friends and I had convinced ourselves to be "free" money. It wasn't long before the collectors were calling, and without the luxury of Caller ID, we learned that it was best to screen each other's calls.

That was college in 1995. A year later they had stopped the creditors from publicizing on our college campus. But for the young, impressionable minds that were victimized because we were slaves to fashion, we'd already paid the price -- with our credit.

      --Fashion Slave
      See Freshmen, prepare for a credit card deluge

Trashy sofa trashes credit
I bought a sofa and love seat for the first time in 12 years. My husband and I have good credit and qualified for the six-months-same-as-cash deal. After three months we ran into trouble with the quality of the furniture. You could feel the springs on the seats when you sat down. A friend of my husband convinced us that we did not have to pay if we put the item into dispute. So we disputed.

After many attempts to talk to the general manager of the warehouse, the company decided they were not responsible for refunding our money. Again my husband's friend convinced us that we did not have to pay for it and they could not touch our credit.

Many months and letters went back and forth with us saying, "What is wrong with you? We are still not satisfied." The company maintained that they were not responsible. Finally I looked into all the legal stuff myself and found the finance company was also responsible to us, so I changed my tone and decided to cry to them for help.

Finally, we got new stuffing and cushions, however our credit was very damaged. I kept talking until someone at the finance company felt so bad for me that they sent a special report to the credit companies exonerating me of any and all late charges. We recently paid off our bill.

My big mistake was not doing the legwork myself. I was darn lucky they felt bad for me and pulled out the ace to help me. If I had to do it again, I would pay the minimum and fight it just the same, except without all the delinquencies.

      --Barbara F.
      See One late payment can doom you and Your guide to becoming a cranky consumer

Loan for a worthless, unfinished certification
The worse credit mistake I have ever made was taking out a student loan in order to get some computer networking certifications. At the time networking was hot and anyone that was Microsoft-and-Cisco certified could make a killing after taking just six months to a year of school.

Halfway through my courses, the bottom fell out of the economy. I was back working at Wal-Mart as a cashier and now had a $9,000 loan. Not only was I unable to get a job in my chosen field, I didn't even get a chance to finish the classes. I couldn't afford the test fees -- which were well over $100 each. With seven or eight tests to take, that just wasn't an option. So, now I am paying for something that I never used and I'm still struggling to make ends meet. Oh well, live and learn.

      --Mitchell G.
      See Know when to borrow -- and why