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I was on the phone with the roofing company, giving them the humiliating details of my life (as one does), awaiting credit approval, when, just like that, Katy-who-was-helping-me came back on the line.
“You’re approved for $19,000,” she said brightly.
“Um. Okay, like…just like that?”
“Yep, you’re all set. The roofers will come out on Wednesday.”
The approval took less than five minutes. Getting to it took seven months.
The Leak that Launched a Budget
A simple-seeming roof leak last September started us on a path to this approval. It was a path of WTF — Wicked Tight Financing . We put our credit cards away cold turkey, swore off even the smallest unplanned purchases, and saved like crazy.
The Path to Credit Approval
Here’s how we restructured our debt and boosted our lousy credit rating by hundreds of points in just a few months:
- Through sweat and tears, we cut costs and hustled side gigs for a few hundred extra dollars a month. My husband graded extra papers at school. I turned to Amazon Mechanical Turk, UserTesting, and some tutoring and small editing jobs. We saved a tiny cushion, and kept paying down our credit cards, even in the face of setbacks.
- At the same time, we used the equity in our home to qualify for a HELOC with a credit union that waived all our closing costs (as long as we keep it open for three years). Yes, that’s right: Our first step away from debt was to go into more debt. Risky.
- We then shifted our more than $25,000 in remaining credit card debt over to the new line of credit, locking in a 5.75% finance rate on that old debt and virtually cleaning the clock on our credit rates. Lookie here:
- We then applied for the sweetest deal the roofer could give us: 18 months interest-free on a repair that’s estimated to take $15,000 or so. We’ll have a minimum payment of $375 per month, and at the end of 18 months we have to pay off the balance or incur 30% interest on what’s left.
- So now comes the new hard part: keeping a handle on our budget, maintaining our discipline, keeping credit cards at or near zero each month, and continuing to pay down the HELOC while also paying on the roof.
Credit Approval Today, Zero Balances Tomorrow
For the first time in years, the money conversations I am having in my head circulate around positive things: savings, possibilities, maybe even travel one day. I’m glad to close this first long episode of money management, and looking forward to the next one, still many years away: Actually being out of debt completely. Find out your own best debt repayment style here.
Need to start a budget? Check out these different approaches.
Disclaimer: The information in this article is not intended to encourage any lifestyle changes without careful consideration and consultation with a qualified professional. This article is for reference purposes only, is generic in nature, is not intended as individual advice and is not financial or legal advice.