My Money Story: Michael – “Credit is a privilege, not a right”

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My Money Story: Michael – “Credit is a privilege, not a right”

In 2015, Credit Karma went to Austin and invited people to talk to us about their experiences with money and credit. We talked to people with many different backgrounds. Some were Credit Karma members, others were not. Participants were told in advance their stories might be shared online. These stories helped us understand the financial struggles that many people face. We thought they might help others too.

These are real stories, told by real people in their own words.

They received a financial gift for sharing their stories, but we want to take this time to thank them again. Check out our My Money Story series on YouTube.

Michael, 27, found out the hard way that it only takes one small mistake to end up with an account in collections.

He was 20 years old and was preparing to move back to Texas after finishing school. When he moved out of his house in Utah, he closed down all of his utilities accounts - or so he thought.

"I had an outstanding balance from a gas company and I didn't realize it," he says. It turned out that the gas company had sent the bill to the Utah address because Michael hadn't provided his new forwarding address.

When he later pulled up his credit report, he spotted the collections account. The outstanding total? $42.

He quickly paid it. And since then, Michael has been super-aware of his credit and how his financial behavior can affect his credit history. In particular, he keeps a close eye on his credit utilization rate to ensure that he isn't spending too much in relation to his credit limit.

"It keeps you in check - you don't go too crazy on your spending. Credit is a privilege, not a right," he says.

Michael also notes that now his finances are healthy and he has a good credit score, it's much easier to talk to his fiancee and family about money issues.

Michael says, "When I started taking care of my finances, it got easier to talk about...if I was still at a lower score, it would be tough for me to (talk about) because it shows I wasn't being very responsible."

Even though Michael is mindful of his finances, it doesn't stop him from having fun. His fiancee is a flight attendant so they both enjoy impulsively taking trips when they can.

"(She'll say) 'How many days off do you have? Four? Let's go to Disney World,'" Michael says.

About the Author:Korrena Bailie is Credit Karma's Managing Editor. She's been writing and editing personal finance content since 2012. When she's not scanning personal finance-related Google Alerts, she's climbing, traveling to countries where it rains all the time (ahem, Ireland) or talking to her cats as if they're people.

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