Bad Credit Isn’t a Moral Failing

I wasn’t careless with my money. I just couldn’t have foreseen my life taking the path that it has — or have planned for it.

I have awful credit, and I'm not the only one. Average credit scores are climbing, but 45.2 percent of Americans have a credit score under 700. And that rise in scores might be an illusion: It may be attributed to people whose financial situations are so dire that they’ve simply dropped off credit usage.

bad credit score
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I’ve noticed an element of blame or a suggestion of moral failure when we talk about people with low credit scores. Many employers run a prospective employee's credit before making a final hiring decision (some states have moved to ban this practice, calling it discriminatory), and higher credit is frequently equated with trustworthiness. If you can’t pay your credit cards, who are you to hold a job? To be a worthy partner?

Conflating a person’s credit score with their character has its roots in how we think about credit and income level. Although the "pull yourself up by your bootstraps" narrative has been thoroughly discredited many times, it's still a foundational aspect of American culture. The American Dream is built on the idea that equal opportunity exists for everyone, and the flip side of that optimism is that those who don't achieve it simply aren't trying hard enough. Likewise, if you have bad credit, there is an underlying assumption that you created your own predicament by being irresponsible with your money. In reality, the system is broken and punishes people facing unpredictability — or who can’t just pull themselves out of poverty.

This story isn’t uncommon. A staggering number of American families are teetering on the edge of financial ruin. In fact, a survery from in January found that only 37 percent of Americans have enough savings to cover a $500 emergency. While it's easy to blame people for their precarious circumstances, most of them are doing the best they can with salaries that haven't kept pace with the cost of living (and particularly skyrocketing child-care costs). If most of us can't handle an unexpected $500 emergency, that means we would be financially devastated by a severe illness or job loss — and it can be nearly impossible to preserve your credit score when that kind of unexpected event occurs.

Take me, for example. I didn't have time to build up good credit before my credit tanked. I got pregnant unexpectedly while still in college, and I married my son's father primarily out of fear and a sense of shame at becoming an unwed mother. Two years later, I had twins. Not surprisingly, my marriage didn't last and I found myself on an airplane home with three children under the age of three and $147 to my name. I was entirely responsible for providing for my children, and I had never worked a job outside of a college newspaper or an internship. I hadn't even finished my degree.

In many ways, I was lucky — I soon found entry-level work. Even so, my entire salary was absorbed by the cost of full-time child care. I ate food people left in the kitchen at work, and my kids' day care set aside lunch leftovers that I could feed them for dinner so we didn't starve. Once I was approved for a state child-care program, I could buy food, but I was constantly forced to choose between paying my rent or my utilities. At one point I missed a car payment and my car was repossessed, leaving me no way to get to work.

My employer didn't provide health insurance. When my kids got sick — which was often — I had to take them to urgent care and pay out of pocket. I'll never forget the shame I felt as I tried to remember which ones I owed money to and which ones would still see my sick child. Eventually I ran out of urgent cares that would see my family and had to go to emergency rooms. My daughter got pink eye and passed it to me, and I left the ER five hours later with eye drops and a bill for $3,000.

I declared bankruptcy in 2003. Almost all my debt was medical debt. I was ashamed to tell anyone at the time because so many people seemed to assume circumstances like mine were due to irresponsibility, not hardship. Bankruptcy allowed me to get out from under garnishments and debt I could never repay, and it also gave me a second chance at good credit. I kept one small credit card out of the bankruptcy and I was determined to rebuild my score.

If this was a fairy tale, I would say I now have perfect credit. What really happened was that a few years down the line another divorce plunged me right back into financial insecurity. Even though I had worked my way up into a high-paying career at a Fortune 500 company by then, it wasn't enough to counteract the dings to my credit.

I have no idea what my credit score is today, but it probably isn't very good. After living through a financial hurricane, I no longer trust that I'll always be able to pay off my cards every month or make a car payment regularly. I haven't sought out or used credit in years. And the fact that I can bypass the credit system is largely due to a one-time settlement that gave me the cash I needed to buy my car outright and pay an extra rental deposit. Most people aren’t as lucky as I was, and having bad credit shuts them out of most of adult life.

The credit system itself is broken. To have a good credit score, you have to behave like you don't actually need the credit you have. While that's easy to do when you're financially flourishing, it’s a lot harder for people who aren't.

As soon as it becomes obvious that you really need the credit you have, the hammer comes down and your credit score begins to plummet. You don't even need to make late payments to damage your credit score; you just need to use your credit in a way (like applying for loans or using a large percentage of your available credit) that tips off the bureaus that you're having financial difficulties.

And since most items stick around on your credit report for seven years, it’s an uphill battle to repair your credit when your financial situation improves. Even small life changes can become big credit problems because our system has no tolerance for the normal ups and downs of personal finance. The only way to avoid these credit challenges entirely is by never having financial struggles at all. For most of us, that's just unrealistic.

What many people don't seem to understand is that having good credit is a privilege. When you're struggling to feed your children or keep your power on, there's no room for worrying about having good credit. I breathe a deep sigh of relief every month when my bills are paid on time, but when they aren't it's not because I chose not to pay them. It's because I didn't have enough money.

Life is part choices we make and part chance, and it's unfair to say that our ability to pay our bills on time reflects our trustworthiness or integrity. Bad credit reflects my circumstances in life, not my moral compass, and I'm done feeling ashamed of it.

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