These 3 Entrepreneurs Overcame Credit Struggles; Here’s Their Advice

Credit unions, credit counseling and even credit cards helped — but so did their resolve to ask questions and put in the hard work.
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Written by Erin Hurd
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Starting a new business can be thrilling and rewarding. But the road from idea to reality can also be long and tough — especially for entrepreneurs who face credit struggles.

Here are the stories of three now-successful entrepreneurs, how they got their credit on track, and the lessons they learned.

From prison to business launch

When Teresa Hodge was released from federal prison after serving a term of about five years, she knew she would face significant challenges as she reentered society. But one problem that wasn’t initially top of mind quickly became apparent: her credit.

“After five years in prison with no payments showing up on my report, my score went down and my credit file was very thin,” Hodge says. She didn’t know what financial options were available or where to begin.

Though a criminal record doesn’t appear on a credit report, it could still negatively impact your ability to find employment or get a loan.

“Many people with criminal records opt out of financial institutions entirely because of fear of rejection — they are being rejected for employment and housing, so they think they’ll get locked out of banks, too," Hodge says.

How credit unions can help

As Hodge set out to rebuild her credit and restart her life, she turned to her local credit union. Since credit unions are smaller, community-oriented, not-for-profit financial institutions, some customers may find them more appealing than a large bank.

Hodge's daughter was a member, and Hodge was able to become a co-owner on her daughter's checking and savings accounts. She put whatever money she could into the savings account, and she eventually got a secured credit card from the credit union.

Hodge used the card for small purchases and made her payments on time, which elevated her credit scores. Eventually, she was able to graduate to a traditional unsecured card. She relentlessly monitored her credit scores and followed expert advice from trusted online financial sources.

Resolved to help others with criminal records get their financial footing, Hodge went on to co-found R3 Score, a financial analysis tool aimed at expanding access to employment and banking products. R3 Score's website notes that it uses "artificial intelligence, machine learning, and human empathy" to create an alternative "score" of a would-be applicant's productivity and risk level.

Hodge also heads a nonprofit called Mission Launch, which offers financial literacy and support to entrepreneurs with criminal records.

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From little credit knowledge to real estate powerhouse

Raised by a single mother in New Jersey, Domingo Rodriguez learned entrepreneurial spirit at a young age, but not much about the mechanics of finance and credit. “We were on welfare, but my mom was always dreaming up business ideas,” the 48-year-old says.

His mother passed away when he was 14, and though his older sister moved home to raise him, Rodriguez struggled. “I turned to the streets because I was lost, but I still had that entrepreneurial drive,” he recounts.

That motivation helped him eventually find his way to college, where he found tables set up around the student union where people were handing out credit cards and free T-shirts to virtually anyone who wanted them. (The Card Act of 2009 has since raised age restrictions and quashed on-campus credit card marketing to students.)

The combination of easy credit and little financial know-how proved to be a recipe for disaster. Mounting bills and missed payments led to credit woes.

How credit counseling can help

Rodriguez’s entrepreneurial spirit led him to real estate. “I wanted to get my real estate license to have security and freedom so I could create my own path,” he says.

But his debt and tanking credit score were catching up to him, and before he could buy his own house, he knew he had to tackle the problem.

“I still didn’t understand credit," Rodriguez says. "I had a terrible score in the 400s, and I didn’t know how to fix it. I started reading a lot and I taught myself a lot, but realized I needed help." He worked with a credit counselor to make a plan to tackle the debt, and he challenged some errors he found on his report, too.

Today, Rodriguez is a well-respected and successful real estate agent in New Jersey with more than 20 years of experience.

From $50,000 in debt to financial expert

Shante Nicole Harris’ life changed dramatically when, at age 22, she was diagnosed with a rare form of cancer. After a year of treatment, Harris successfully beat cancer, but she began to fall into a dangerous trap: using credit cards to supplement her income.

The medical debt began to pile up and, coupled with reduced hours at her banking job because of her cancer treatments, she resorted to charging everything she could on her credit card to get by.

A few years later, the unexpected loss of her job, followed by divorce, led to ballooning debt levels as Harris struggled to pay her legal bills and support her son. Once again, Harris had to rely on credit cards because she had no savings. As debt went into collections, her credit scores hit a low of 520, leaving Harris unsure of what choices she had.

Growing up with a single mother in what she describes as “not the best neighborhood” in Washington, D.C., Harris says she was taught to be frugal but didn’t learn the basics of finances. “We didn’t really talk about money,” Harris recalls.

How the right credit cards can help

Once she was working again, Harris' resolve to pay down her debt and fix her credit led her to voraciously read and research her options. “I was obsessed about learning how to fix my situation for myself,” she says.

She started with a secured credit card with a $300 limit and a $29 annual fee. After she used her card responsibly for a year and paid the bill in full and on time each month, the bank transitioned her account to an unsecured card.

Once her credit scores began to rise, Harris was able to qualify for balance transfer credit cards with 0% APR. “I did the ‘balance transfer bunny hop’ for years to avoid interest and chip away at the debt," she says.

She then followed the "snowball method" of paying off balances, and within five years found herself clear of the more than $50,000 in debt she had amassed.

Friends began to ask her for advice about how they could tackle their own credit issues, which led her in 2016 to form a Facebook group to give people a safe space to talk about money. Harris used her research and experience to give answers. Within three months, the group grew to more than 15,000 members and Harris knew she was onto something. (Today, there are more than 90,000 members.)

“Members would message me saying they were still overwhelmed with all the information and wanted individualized help,” Harris said. She eventually quit her job at the time and launched her own full-time credit coaching business, Financial Common Cents.

3 tips from these entrepreneurs

1. 'Be hungry' to learn

Through her credit counseling work, Harris sees a common theme: “People don’t understand credit or finances because they weren’t taught. No one taught them about money," she says.

But even if you didn't receive much financial education early on, it's not too late to learn. A wealth of information is available online from a variety of vetted and trustworthy sources. And if you lack internet access, your local library can help.

"Ask lots of questions and find lots of answers," Rodriguez notes. "Be hungry and relentless to improve yourself and your mindset.”

2. 'Do the work'

It can be tough to get started when you feel overwhelmed or insecure. But, as Harris points out, “not facing it doesn’t make it go away. Everything is fixable.”

That's true even if you lack exposure and experience.

“Many people who have been in prison have more payday centers in their neighborhood than banks," Hodge says. "They never had a relationship with banks. But if you do the work, there is a bank that will say yes, even if five banks said no. Be determined.”

And, then, be willing to share that knowledge. Rodriguez ensures he's teaching his kids the financial lessons he didn’t learn in his youth.

"I tell them that the less informed we are, the less we can leverage," he says.

3. 'Seek the help'

It’s possible to educate yourself about credit and DIY your own debt relief or credit plan, but sometimes you still need a helping hand.

“Expert help doesn’t have to be expensive. Just seek the help," Harris says.

Look for websites from trusted institutions that have proven track records of reliability and expertise. Evaluate “experts” based on their credentials. Beware of bad actors who may falsely promise to negotiate your debt relief directly with creditors. Research the Better Business Bureau to look for complaints, and steer clear of anyone trying to sell their services over the phone and charge an upfront fee.

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