Success Story: Nancy Gets Her Credit Back on Track. And You Can, Too.

If you’ve been through serious financial problems like bankruptcy or foreclosure, you no doubt experience moments where the future feels very bleak. You may feel like your credit is ruined forever. Or you may be terrified, and afraid to ever sign your name to a credit application again.

Those feelings are perfectly normal, but not completely rational. Over time, you can rebuild good credit. And if you want to buy a home or car, you probably should.

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Recently, I spoke with Nancy Rae Evans, who shared with me the progress she’s made on improving her credit after bankruptcy. I asked her to let me share her story, because it illustrates perfectly some of steps almost anyone can take to get their credit back on track. I hope you’ll find it helpful if you’re struggling to recover from a credit setback.

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For nearly ten years, Evans worked in the mortgage industry, and prior to that she worked with businesses, helping them manage their cash flow. As a commissioned salesperson, she experienced firsthand the challenge of trying to budget on a roller coaster income. Without a steady paycheck, she found herself turning to credit cards when business was slow, and then she’d scramble to catch up when the checks came in.

Evans says she wasn’t wasting money on frivolous purchases. “I am good at self-deprivation,” she laughs. “I got into credit card debt spending on my business, not my possessions.” She often justified business expenses, even when she didn’t know how she would pay for them. “It’s almost a seductive thing,” she notes. “I’d think, ‘This is the magic bullet (to help my business grow).'”

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But there was no magic bullet, and in 1999, she filed for bankruptcy, after putting it off for three years. After that, “I didn’t use credit for years,” says Evans.

Last year, she got serious about rebuilding her credit. She was already had a good handle on her spending. She had become a certified personal finance coach, and had launched her business, Embracing Money, to help others get the same clarity with their finances. She knew how to handle ups and downs in her cash flow. But she also knew that she needed to take the plunge and get back into the world of credit.

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Image: sovietmole, via Flickr.com