The Ravens Are Restless

Living in the bush allows a person to see things that they otherwise wouldn't, if they're paying attention. I have a bunch of issues on my mind right now and a walk often helps me sort some of those things out. I've been doing a lot of walking lately.

I was pacing down by the curve in the dirt track we call a road, where the horses used to be watered in a previous era. I heard an approaching rustle of wings and an intermittent Canada Goose call. Caught my attention because the geese usually don't come up by us. They nest close to the river and the only other place I ever normally see them is the cornfields in the fall. When the bird winged into view, it wasn't a Canada goose at all. It was a raven imitating the goose's call and it was getting a distant answer from the direction of the river.

Ravens are very intelligent and I imagine whatever game it was playing must work. Either eggs or goslings are on the menu. I'm not sure if I was a raven I'd be willing to mess with a goose. They can put up a heck of a fight. I had a call centre friend in Ontario who loved to golf. She swatted one into the bush next to the course and thought she might be able to find it and play it anyway. She came face to face with a mother goose with a nest full of golf balls. She decided to take the penalty.

A short while after seeing the goose imposter, I saw another raven getting dive bombed by a couple of smaller black birds. Must not be a lot of dead things laying around. I'll have to make point of running over a couple of racoons or something.

Rebuilding Credit: Our Story

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We didn't want to declare bankruptcy and I honestly thought that there could have been a better way. The big banks though really don't want to deal with it constructively and generally just send it off to a collections agency and let them be the bad guys. I can't see how that was to their advantage but suffice it to say, we couldn't get a remotely workable offer from them. Long term biting the bullet and getting everything settled was probably our best course of action. How we got to that point is a whole other story. This isn't about how the wheels fell off though. This is about how we rebuilt.

Putting the wheels in motion

Our first step was to research bankruptcy firms and set up an appointment. We contacted Alan Marshall and Associates and got an appointment with the top man himself. Surprised me since they are one of the largest firms of this type in maritime Canada.

He was helpful in looking at alternatives and reviewing our case. We discussed the costs involved and a basic timetable of how everything would play out. We would keep the family vehicle and had we a home we would have kept that as well. We were making payments on a small piece of property which was an unusual situation. Because the property was not in our name, it would not be affected by the bankruptcy provided we could somehow keep making the payments. There was the home in Ontario which we'd already given up as lost. We could keep it if we could get back there and live in it. That of course under the circumstances was impossible. There were no other major assets in play.

The bad news was that we would both have to declare bankruptcy because everything we did as a couple to that point had been done jointly. That effectively doubled how much we would have to pay the bankruptcy firm monthly (ouch).

After that we had a second meeting, signed all the necessary papers and set up our required counseling sessions. Those were far more dignified than we were expecting. From the start they told us that the fact that we were somehow surviving on our limited income meant there wasn't a whole lot they could teach us.

It was a painful first step and the nine months of payments were exceptionally difficult. We didn't eat very well, but we survived and had plans for moving forward.

Reestablishing Credit

At that point I had a huge advantage over other people in the same situation. Our bankruptcy counselor and our bank had recommended getting a secured credit card with Capital One. At the time I was working at a call centre in the applications department for Capital One. Through self study and experience, in some ways I knew more about rebuilding credit than many so called financial advisors.

Ideally we wanted a card with no annual and the smallest security deposit possible. Capital One occasionally offer a card with no annual fee. We prayed that we would receive one of those offers and we did. I could have gotten the offer anyway. I learned that the codes on the offers were not totally unique and several people could use the same offer code to apply for a card (if I still worked for them I could get it trouble for spilling that). I also knew from experience that people who declared bankruptcy once would not be required to pay any deposit at all provided they had not drawn out their financial woes for an extended period of time. We had crashed and burned over a relatively short period of time and we did not end up needing a deposit. We did make sure the credit reporting agencies were updated that our nine month period had been successfully passed. If they aren't updated, you will be asked for a big deposit or even declined. Francine and I both got separate credit cards and both are playing it the same way.

Just getting a credit card doesn't earn you any credit unless you use it. I also knew that if you use it and pay it in full each month you don't build any credit either. I bought a small machine (cheap chopsaw) for my wood shop on the card and paid it off over three months.

I am aware that there is a faster way after talking to a specific customer but we didn't have the financial resources to throw at the problem. This customer went from nine month waiting period completion to excellent credit in one year and I know how he did it. He got a card with Capital One and ran it up close to the limit (never over) every month and before the due date he paid it down to 25 or 30 percent of the balance. I don't know the exact percentage. I'm sure it's out there somewhere. He got another secured card with another company and did the same thing. We didn't have the financial where withal to imitate his success, but we had a solid enough plan.

Credit established!

Upping our game a step at a time

When building credit, two credit products are better than one. I can guess why but beyond that can't really explain. From working with credit card applications on a daily basis, I know it makes a difference.

We got a lucky break. Canadian Tire was running a promotion where you could apply in store. Every time one applies for credit it puts a “hit” on your credit when the bank checks your credit bureau file. Three hits within a short period of time can negatively affect you ability to secure credit. These hits drop off after three months. This opportunity came up outside of that time frame so there were no “hits” waiting in the background. I went and got approved for a card with slightly better terms than the one I already had with Capital One. Now I had my two credit products and I maintained very low usage on both of them. My wife tried to apply for one online from them but was denied. In person when possible does work better.

At this point in time we went through another round of financial body blows. Government housing wanted a ridiculous rent increase based on bonuses I was no longer receiving and I couldn't convince them to relent. That property we had managed to keep through the bankruptcy saved us. We were able to invest in electrical power for the camp and moved there. Gas prices went through the roof but I managed to eventually find work more locally. Finally the family vehicle was on its last legs and needed replacing.

When purchasing a replacement for the family vehicle, I got to sit through the process with a financial adviser. He was shocked at the deal we were approved for. Not only did the vehicle loan get approved but we were offered a preferred rate. He wanted to know how we'd rebuilt our credit on the income we had because this was beyond his experience. I grinned. To get the deal he said our score had to be in the above 800 excellent range.

Keeping it all under control

We were far more indebted at this point than we could be comfortable with. I am debt averse and would rather owe nothing. I didn't want the third product but didn't have much choice in the matter. I need the vehicle to get to work, if nothing else. We still were within our workable plan though and this moment was regarded as a debt peak we hope to never match again.

That fall we paid off our property and the deed was transferred into my name. That brought us modest debt relief. It also added an important asset to our credit file. Owning property outright makes a big difference when it comes to credit. It will open doors for us in the future.

At this point in the game my credit is exceptional with only the black mark of the bankruptcy itself hanging over me. That drops off after seven years and I'm not particularly concerned about it anymore. It is a milestone I'm looking forward to but it isn't earth shatteringly awesome. The hard work is already done. We've gotten credit, we used it, we made payments on time and in full. We just recently paid off my Capital One card and with be canceling it within the month. We aren't financially strong but we're managing and we have solid credit we can work with. I look forward to being debt free but I can't complain about the progress made considering the resources we've had to work with.

Final Words

I'm not a financial adviser and can't bear responsibility for the decisions of other, but hopefully our experience can be of benefit to those who might have to travel this road. This is not intended to be the last word in how to go about building credit. There is a lot that can go wrong. If you have to, seek out professionals, there are resources out there to help.

Three Reasons to Get Your Credit Report

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Credit scores and credit reports have risen in importance beyond their original intent. They were created to provide the banking industry with a tool to help them make better decisions in regards to offering credit to their customers. Now it is often required by employers, when hiring workers. Whether that is good or bad is not something I'll debate here. Suffice it to say, it is important for you to know what is on your credit report, because decisions that effect you are based in part or in whole on them. Here's three good reasons you should get that report.

1. Identity theft. This is probably the biggest scariest thing that could happen to your credit. You'll probably be aware of this issue before you get your credit report. The process for trying to resolve all the damage though will involve getting your credit bureau file. The information there will be needed to identify what information is yours and what is from someone else.
   
2. Mistakes. Think of all the things that could possibly go wrong. I have personally encountered a large number of errors on credit reports. I have come across similar names causing confusion, similar social security numbers and social insurance numbers, business id numbers confused with social security numbers and some outright errors that made no sense at all. When we got copies of ours in the course of our bankruptcy, my wife was listed as having been employed by a company we never heard of. During that time frame my wife was a stay at home mom with no outside employment at all. Knowledge is power. You want to know about these kinds of mistakes so that you can have them corrected. Even more common is information that should have been updated and wasn't.
   
3. Uncanceled credit cards or other accounts. I discovered this the hard way. If you pay off a credit card and don't ask to have it canceled, the account will continue to exist. Doesn't matter whether you cut the card to pieces and nobody has sent you an invoice showing your balance of zero in more than a decade. That card can come back to haunt you even if you don't owe a dime on it. That has happened to me. I've changed banks and credit card providers on several occasions. All those zero balance cards were reported on my bankruptcy even though I owed them nothing. It has and may create unnecessary problems for me. Go through your credit report and make sure every one of those accounts are closed.
   

I would encourage anyone who has not seen a copy of their credit bureau file in a very long time to take the time to order a copy from both Equifax and Trans Union. Those are the two main providers to the banks. The files will not necessarily be identical. Getting them both corrected if necessary is an important way to make sure you're treated fairly.

The Key to Understanding Credit Scores and Credit Reports

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The most important thing to understand about credit scores and credit reports is that they were not created for your benefit. They were created by the banking industry for the banking industry. They do not tell the bank whether you are honest or an all round good person. It is a tool that they use to estimate how much money they can make from you. If you learn nothing else from this, please understand this one point.

The bank is not your friend. It's great that you might have friendly interactions with their employees but ultimately they are at best a business partner. When they give you a bank account, loan, credit card or mortgage, they are not doing this as a favour. This is business. Their objective is to make money. Your debt is their bread and butter. As long as you are indebted to the bank, they are making money from the relationship and they like it that way. This isn't necessarily a bad thing but it's important that you understand the relationship. Personally I would rather have no debt. On the other hand the bank would be happy if I was in debt to them for the entirety of my life. As long as we can pay, that's financial stability for them.

This has everything to do with credit scores. If you rarely use credit and when you do, you pay it off within a very short time, your credit score won't be very good. Sure you're honest, hardworking and responsible. That doesn't matter to the bank. You haven't demonstrated to the bank that you need them and that they have hope of making good money from you in the future. You can't get a great credit score without using credit.

A person who is piled up in debt even if they make the occasional late payment, will have a better credit rating than someone who has paid things cash all their life and owes nobody a cent. That may seem counter intuitive to the average person, but when you understand that credit ratings tell the bank whether they can expect to make money from a person, it should all start to make sense.

Banks are not really your enemy either. If you understand credit at the basic level I've given you here, you can start making these banking tools work for you instead of against you.

One Card Down

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Yesterday we had our income tax return deposited into our bank account and it allowed us to pay off one of the credit cards. That was a very gratifying moment. It was a long time coming but it marks an important step in overcoming our not so long ago financial disaster and subsequent bankruptcy.

Declaring bankruptcy is no fun and is best avoided. Unfortunately most people who do haven't been given any workable alternatives. We were determined that it not be the end of the world. Credit can be rebuilt and through working for Capital One I learned a great deal about how to go about it. I learned through additional self study online. It is my intention to write a series of short articles or blog posts to tell what we did and why, because I think it can be helpful for a lot of other people.

The card we paid off was the Capital One card I applied for specifically for rebuilding credit. Now that we've paid it off, it has reached the end of its usefulness to me. It is helpful to have two credit products in play but we picked up a third one last year when we bought the family minivan. My credit score at this point in time is excellent (well above 800 possibly close to 900). It is not possible to build it higher anymore. The only ways for me to have better credit worthiness is to make more money and have the bankruptcy drop off my report (which can only happen with time). There is no remaining reason to keep holding the card. There are several good reasons to get rid of it. I'll deal with that in the course of those articles.

This isn't to say that we aren't struggling with more debt than we're comfortable with. I'd really like to clear it all off. There are other things I'd like to be working toward. Becoming a credit guru isn't anything I aspire to. Still I've learned a lot traveling this bumpy road. Hopefully our experience can be a blessing for someone else.

Technical Retrieval

Big thank you to Wesley for helping retrieve some images from an older computer. Not only did he find the hard drive and recognize it as one from my old computer but he was able to access the files on it. It didn't have what we were looking for so we powered up the immediate predecessor to my current laptop. Sure enough we were able to locate the file containing a few drawings and water colours that I did in the past.

Now that I've got them transferred to a file I can readily access, I have to decide what I'm going to do with them. Francine doesn't want a gallery on her site with stuff that isn't hers, even though she does like my work. I'm considering setting up a free account on Fine Arts America in my name and then just adding a gallery to my blog. That would be the simplest. Alternatively I might try something with Zazzle.

Francine would like to see me take drawing and painting back up but I have enough hobbies and I'd rather at this point in time focus on my writing. I just don't have the time right now to devote to any other creative efforts of that sort. Not that part of me wouldn't mind doing it. Maybe when I retire.

Slow or Methodical

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I've been labeled as slow on a number of occasions on the job. It can be frustrating because I try to work methodically and efficiently. At times I don't look like I'm moving as fast as my superiors think I should be moving. It actually ended up being an issue at two places I worked in the past. The frustrating part in both instances was that over the course of the day I produced more work than all my counterparts. They just looked like they were working faster.

Yes maybe it is possible for me to turn up the speed but can I keep that up all day safely. Most of the time the answer is no. For me to improve my work speed I try to improve my methodology. I try not only keep my tools handy but I try to place them in exactly the same position every time I put them down. I try to pick them and my work up with the same motion every time. I find it pays off in greater productivity. If I'm in an assembly line, I try to match speed with the line (it's pointless to bury the next guy on the line).

For someone who is at times considered slow, I've had some very gratifying moments. In a wood shop where I worked, I was assigned to trim desk tops on a machine called a rover. All I did was load the machine, initiate the operation and then unload the finished piece. After a few hours the supervisor came back to check my progress. He checked the computer, counted the pieces, gave his head a shake and then rechecked everything. Turns out I was in the process of destroying the company productivity record for that particular operation. He had trouble reconciling my perceived work speed with the numbers the computer was giving him. I worked for that company for about seven months breaking similar records on a number of other machines in the shop. I set production records with one of the companies where my work ethic was being questioned. It wasn't a one time thing either. That was my normal work speed.

This bit of a rant isn't brought on by anything that is happening on my current job. Just crossed my mind this evening.