My Friend Ruined his Credit

 I helped a friend who did some work for me.  He had no idea what a credit history or credit score was.  He was a 50 year old handyman that worked for cash.  I explained how credit works.

We signed him up for Credit Karma on my computer.  He had a 570 credit score.  

We found he had ony  one negative on his report.  Verizon had an unpaid bill of $120 from three years previous.  They had not turned it over to collections.

He had no other credit history.

We went to Verizon and asked if they would remove the negative and open an account for his phone.  They immediately removed the negative and opened up a Verizon account for him.

I put him as an authorized user on a twelve year old credit card of mine.

Within two weeks his score jumped to 760.  He had just my credit card on his account and it was 12 years old.  He also now had credit at Verizon however it did not show on his credit report.  The negative from Verizon was removed.

Lowes and Capital One Cards Applied for

He applied for a Lowes card and a Capital One card.  He got the Capital One card with a $4,000 limit but was turned down by Lowes.  They said his credit was too thin.

He went back to Verizon and charged two $1200 phones and a $600 tablet with unlimited data on all three.  His monthly phone bill was now just over $280 with the equipment payments and insurance.

He made his initial deposit and the first payment on hisVerizon service and equipment.  

A few weeks later....
Both Verizon phones and his tablet were stolen. They were on the front seat of his van.  Someone broke the window and stole all of them in the middle of the night.

He had insurance from Verizon on his equipment. However it was going to cost him $250 for insurance replacement, $100 for each phone and $50 for the tablet. His next month's $280 service payment was due.

He did not have the $500+. He went to AT&T got two new $1200 phones and a tablet, new service and insurance.  AT&T did not require a down payment due to his new credit score.

He also spent $3,500 on his Capital One credit card.

I did not see him for several months. I ran into him and he was back using a pay as you go Straight Talk phone.

When I helped him with his credit he said I could track his Credit History on Credit Karma.  I told him I was going to write a blog about his credit experience.  I was thinking he would build his credit and I wanted to see how long it took to get a good credit score for him.  He really wanted a Lowes Credit Card for his handyman work. I wanted to see how long it would take for him to get his Lowes Card.

I looked at his Credit Karma report after talking to him about his Straight Talk phone.  

His Verizon account, his AT&T account, and his Capital One credit card had all gone to collections.   He never got a Lowes card.  I don’t believe he made any payments on the credit card.  My Chase credit card still showed on his account as paid in full. His score is back to 580.

Sometimes it doesn't pay to help people with their credit.  He really wanted good credit so he could get a Lowes card to charge product for his handyman customers.