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My Credit History

 I am about to have my last birthday of my 7th decade.  I know, a strange way to say I am turning 69.

I was 33 years old with a problem. I had no idea how credit worked. I had a couple of credit cards which I usually paid on time.  At 28 I had purchased my first house with owner financing.  The woman I bought my first house from did not check my credit as I made a significant down payment.  

At 33 years old I was applying to purchase my second house and I was going to rent out my first house. We applied for a home loan from a bank, however my wife at the time had missed a payment on her credit card and I had missed a payment on my credit card.

The Bank required an explanation as to why we had missed payments.  I thought it was silly as neither of our missed payments were for more than $25.  My income at the time was significantly more than needed to easily make the payments and other than a small loan on the first house we were debt free.   It was not the value of the missed payments, it was the fact that we had Two Missed Payments in the last two years.

 

I am guessing my credit score was under 500 when I bought my second house with a bank mortgage.  I had a large down payment so my score did not matter as much and the banker was a family friend. 

My First Building Credit Lesson

This was my First Building Credit Lesson.  Never be late on a payment.  I have worked to eliminate that from ever happening again.  Over the next few years I had pretty good business success and was able to save up some money for more down payments. 


I bought a duplex with a bank mortgage, took over a mortgage on another duplex and bought a comercial building.

After my first Building Credit lesson I was determined to learn more about credit and how it works.  I had a thirty minute chat with my banker, a family friend.  He stated  it was simple, always make payments on time.  He also showed me how credit scores are calculated. 

The Key to building Wealth

Buy assets that go up in value.

 

I stayed on the straight and narrow.  I did not borrow money to buy cars or personal items.  I only borrowed money to make money, I paid down debt as fast as I could.  I always paid down the highest interest rate loan first.   I borrowed nearly a million dollars in the late 1980s to buy rental property.  

As time went by the rental properties paid for themselves.  Rents continued to go up and Real Estate values climbed as well.


Why I love Investing in Rental Real Estate

I purchased rental real estate that after my down payment was able to make the payment on the loan. After buying a couple of properties and the rents going up with inflation they easily paid for themselves and allowed me to hire property managers. While I did not take home a lot of money from them over the years, they paid for themselves. The properties also went up in value.


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