4/25/17

Sneezing Can Make Your Eye Fall Out and Ruin Your Credit Report

Injury Prone (to say the least)

Nearly four years ago I suffered one of the worst injuries of my athletic career. Now before I get into the details, you should probably know I was pretty good at getting hurt while playing sports; pulled hamstrings and sprained ankles were commonplace for me. I even tore my achilles tendon as a 16 year old, and that is an injury that's only supposed to happen to old men! For anyone that knows me, this story may sound like just another drop in the bucket, but trust me, I promise this one is a little different.

During a summer league at-bat back in 2013, the pitcher gave me a fastball right down the middle. Being the great hitter I was, I licked my lips, took a giant swing, and... hit a weak ground ball. I unfortunately came to the quick realization that the ball did not sail over the fence for a home run, but instead was slowly rolling down the third baseline, very similar to a bunt. A glorious home trot was out of the equation, so I jolted into top speed to try to beat out this swinging bunt. As I was closing in on first base, I could tell it was going to be a close play. The second baseman came charging over to field the throw from the pitcher, and then it happened.

The pitcher's throw was a little right of center which caused the second baseman to lean in towards the base path. I was crossing first base at this exact moment and my face struck square on the shoulder of the second baseman, knocking me straight to the ground. As I attempt to collect myself, I noticed a pile of blood on the ground and realized I had at least suffered a bloody nose and really bad headache. Because it was a head-related injury, the medical staff (which consisted of an off-duty nurse and my parents) suggested that I remain still and wait for professionals to check it out.

Playing ball in rural Ohio meant that I had to lie on the ground for about 20 minutes before an ambulance arrived, and then another 20 minutes on a stretcher until we got to the hospital. I then went through a series of tests and exams to determine just what had happened to my body. All brain and spinal cord tests came back normal (which I am extremely thankful for), but the x-ray on my face came back with some bad news. I suffered a pretty severe fracture the facial bones near my left eye, and it required reconstructive surgery.

About a week before surgery my doctor told me to try to avoid sneezing or my eye might fall out. 
I'm not sure if it actually would have fallen out if I sneezed, but talk about nerve-racking!


So what in the hell does that story have to do with personal finance and credit reports?

Insurance is Complicated

Believe it or not, for a kid that just turned 21, the details of health insurance were not on the forefront of my priorities. At the time of the surgery, I was partially covered under my parents' insurance, but I also had some coverage through college since I played baseball. To make a long story short, a couple hundred bucks from a multi-thousand dollar surgery did not get paid as a result of the complicated insurance split, and a claim was filed against me. To the credit bureaus it looked like I was purposefully avoiding paying off my debt, but I didn't even know a serious issue even existed.

About a year ago I applied for a credit card and that's when I noticed I had negative claims on my report. This was very alarming to me because as a recent college graduate I thought I had done very little to impact my credit score one way or the other. Alex may tell you that I take too long to pay him back for beer and baseball tickets, but outside of that I always pay my bills in full every month and have never taken on bad debt such as a payday loan.

After checking my credit report and seeing that it was from my surgery, I (with the help of my parents) swiftly moved into action to correct the debt against my name. Thanks Mom and Dad!

Lessons Learned

I still don't know the secret formula that makes up our mysterious credit scores, but I did learn two very important lessons as a result of this unfortunate oversight.

First, IF you can be responsible, consider getting a credit card early in your life and use it frequently for purchases such as groceries or gas. THEN PAY THE ENTIRE BALANCE OF THE CARD IN FULL, EVERY SINGLE MONTH. This method isn't right for everyone, but if you can refrain from using the credit card for personal purchases (clothes, beer, video games, etc.) this is an easy way to slowly build some positive entries on your credit report. Had I done this, I would have had some positives notes on my credit report to help offset the negative outlier.

Second, check your credit report and check it often. Here are my top 7 reasons why:
  • It's free for anyone to do up to 3 times a year (some banks and credit unions allow you to easily check them, too)
  • It only takes a few minutes
  • Your credit can be affected by something you may be unaware of
  • It can help you find errors - sometimes wrong information can be filed in your name
  • You can save money - good credit equals better interest rates on things like mortgages and auto loans
  • Good credit qualifies you for the best credit cards with awesome reward perks - it pays to be financially responsible!
  • It can help protect against identity theft
Need an example to really show you why this is so important? You got it. Just a 1% increase to your interest rate on a 30-year $300k mortgage could cost you more than $50,000 in interest payments! I don't know about you, but that's cash I want to keep in my wallet.

How Do I Check My Report?

At this point if I haven't convinced you take action, then one of two things must be true; you already check your credit report regularly, or I am a terrible blogger. While the latter may inevitably be true, I still hope you'll consider taking control of your financial wellbeing and check out www.annualcreditreport.com. This is where you can view your credit report for free up to three times a year (one from three different agencies) and see what is impacting your score. The reports do not show your actual credit score itself, but they show you the positive and negative components that are considered when the bureaus calculate your score.

How Often Should I Check?

Like most things in the finance world, it depends. If you are getting ready for a major purchase (i.e. a house), then it might not be a bad idea to check your credit report with all three agencies (Experian, TransUnion, and Equifax) at the same time to ensure that all reports do not have any erroneous claims. Otherwise, I recommend splitting up your reports to check it periodically throughout the year. For example, look at Experian's report in January, TransUnion is May, and Equifax in September. This method helps quickly identify any unfavorable items that could pop up on your report throughout the year and enables you to take action to get it removed ASAP.

My Last Rant

Credit scores and reports can seem scary and mysterious, and I think this is mostly because no one really tells you about them. This not only is unfair, but is also one of the serious flaws of the personal finance climate in America. Only the rich and well-off are privy to these financial secrets, and personally I think that's a load of shit. Here at Smart Money Seed we believe in our generation, and in order for us to become the most financially successful generation ever, we have to break down the wall of privileged information. 

Now I challenge you... Start living your fiscally proactive life today and alleviate the burden of the unknown.

2 comments:

  1. Nice post Christian!

    The Credit Karma website and App are good ways to get your credit score and credit report for no charge. The credit score simulator is a nice feature that allows you to see the possible impact on your score of a decision that your considering (like applying for a new card).

    Also, you mention that as a recent graduate you hadn't done much to impact your score... Many parents help their kids pay for college in some way or another. One way parents can do that and help setup their kids for success after graduation, is to identify a spending category the parent will pay ("food" in our case) and have the college student (or to-be student) apply for a credit card in their name to be used SOLELY for this purpose, with the parent making the regular, timely payments. We did this for both Alex and Max and Bank of America, Capital One, and Discover were all willing to issue a credit card with a low limit to a new high school graduate. Of course with the cards, Alex and Max got the lectures about limiting their spending category and staying within the cards' low spending limits.

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    1. Thanks, Tim! Those are two really great pieces of advice. I'll have to check out Credit Karma.

      As long as you didn't see too many transactions from the "14 & 0" convenience store on campus, I can assure you that I don't think Alex used his credit card to buy beer :)

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