Her credit was an obstacle to buying a house. Here's how she fixed it.
Karleh Wilson didn't know she had a credit problem until she wanted to buy a house.
Karleh and her fiancée, Kareem, have been living in a rented 3-bedroom home with their daughter, Kaari, in Philadelphia. But when they realized how much money they were forking over in rent that wasn't going towards any long-term investment, they decided to start the process of purchasing their first home.
Karleh researched what she'd need to make that happen, and found out she'd need a credit score of at least 650. However, when she looked at her free credit report, she found out her credit score was a dismal 315. So, in order to get a mortgage, she'd have to find a way to at least double her score, and hopefully get it even higher to land a competitive interest rate.
Karleh Wilson. All photos via Upworthy.
Karleh is a smart and responsible person. She went to an Ivy League school. So how did she end up in such a terrible credit situation?
It came down to an oversight that she made while she was in college.
She had gotten a card at a department store not realizing it was a credit card.
"I remember being in college and getting my first credit card," says Karleh. "I also remember being confused about the difference between a credit card and a store card. At that point, I was still getting used to using a bank account, much less navigating the complicated world of consumer credit."
Since Karleh didn't realize the retail card was actually a credit card, she had been missing payments for quite some time, which ultimately had a negative effect on her credit score.
Like many college kids, she didn't have the financial education to fully understand how credit worked. Karleh's dad feels that he bears some responsibility for that fact. "That's not stuff you talk about in the family," says Karleh's dad. "You don't want to put that stress on your child."
Thankfully, Karleh was able to turn her credit score around with some diligent research and new habits.
She was embarrassed by her low score, and she and Kareem want to raise Kaari in a financially secure household.
Her dad was a big cheerleader throughout the process. He told Karleh she could turn her credit around, and said it with such confidence that she believed him.
Karleh started paying all of her bills on time. She got a credit card that was built for people with poor credit, used it for all of her purchases, and payed it off in full every two weeks. "That really drove my credit through the roof," she says.
"At this point, I've gotten my credit in a really good situation," Karleh says, "and now I'm approved for a mortgage."
At 24 years old, Karleh has gotten her credit under control and will soon be closing on her first home. In addition, she'll be providing a financially savvy example for her daughter, and her dad couldn't be more proud.
To learn more about Karleh's financial journey, check out this video: