Credit Score! What Have You Done For Me Lately? Ooh Ooh Ooh Yeah!

A lot of readers will recognize the title of this post. It was inspired by hit singer Janet Jackson’s popular song entitled: What Have You Done For Me Lately?

The song describes a love interest that used to be attentive and offered up the world.  However, in the lyrics we find that the relationship has soured and now those promises and gifts of yesterday are no more. After remembering how good times used to be and evaluating the history of the relationship, Jackson asks a poignant question:

What have you done for me lately?

That’s pretty much how I feel about credit and the drive to increase credit scores so that you can get more of it by any means necessary. More after the jump.

One of the first things a lot of my clients want to know is how soon can they repair their credit and get a high credit score again. This is a particularly important question for clients considering bankruptcy or for clients who are facing debt collection lawsuits.

Honestly, while I completely understand the need to ask this question and the drive to “raise the score,” this is a bit troubling to me.  As Nathalie Martin, author of a blog post entitled “Lets Stop Praying to the Credit Score” wrote over at Credit Slips, the main purpose of having a good credit score is “to qualify for more credit.” But for many of my clients, having easy access to credit is what usually got them into trouble in the first place.

That Was Then, This is Now

In the old days of “Pre Recession,” bankruptcy attorneys often gave their clients a speech that assured them that credit could be easily repaired after bankruptcy. It was true. In those days, as long as bankruptcy clients used healthy spending patterns they would soon find themselves on the road to a high credit score. Attorneys practicing in New York knew that soon after bankruptcy or settlement of debt lawsuits, bankruptcy clients from Brooklyn to the Bronx were going to have mailboxes FLOODED with new credit offers.

But that was then.

In today’s economy we truly are in uncharted territory. Credit is tight for everyone.  That’s what they mean when they describe the credit markets as being “frozen”.  You see before the recession started, credit was as easy to come by as sunshine in the summer time. In today’s economy, even those with outstanding credit scores are having a hard time getting credit offers.

But if you take a step back and think about it…is that really such a bad thing?

What Have You Done For Me Lately?

Remember, most Americans used credit as a way of living beyond their present means.  I mean, if the average person had enough money to afford that luxury car or vacation – they would have either paid for it upfront or used a down payment to pay it off in real dollars like a lay-away plan.

But most Americans preferred the instant gratification of swiping the credit card and getting it now. That’s what credit gives you – the ability to get today what you could only afford tomorrow.  The problem is – our culture put more emphasis on enjoying the “now” and never concerned itself with what would happen when those debts had to be paid.

Unfortunately, now that credit is also used to evaluate people for things like jobs, insurance or apartments, low credit comes with a greater cost. But that is the reality in this new economy.  We have to deal with it wisely.

Moving Forward

What is important to remember is that credit is something that is repaired over time.  There are no quick fixes. What we do know is that you are most likely to get credit when you have a steady income and build up a savings account.  Paying down your debt is of crucial importance as is keeping track of and reducing your spending.

At least in the short term – credit is going to be more expensive.  So when you swipe your card to pay for that lunch, watch, dress or car, you are likely going to pay a higher interest rate for the luxury of enjoying today what you could not afford until tomorrow.

This can be especially challenging for clients like mine who live in the Shopper’s Paradise – New York, New York.  It is difficult to turn away from using the card when you are surrounded by people who look and act as though they live “with the top down screamin out money ain’t a thang,” a la Jay Z.

Just remember – life is not a BET/MTV video.  We can no longer allow ourselves to measure our real world success and happiness against the scripted visions of success we see on TV.

It’s time that we start getting serious about our financial reality.  I know it is not nearly as fun to be serious and mature about our finances as it is to go on shopping sprees.  But when it comes to credit, lets evaluate its role in our lives as clearly and as honestly as possible.  If you cannot truly afford that item today – let it wait until tomorrow.