Recovery is about so much more than just getting sober. Removing the drugs and alcohol is a huge feat, but it is only the first step to living a life in recovery. Once the drugs and alcohol are removed individuals uncover how much the substances and alcohol have affected all aspects of their lives. Most individuals are lefts with financial challenges that are overwhelming and stressful.
Financial sobriety is an important topic that is often overlooked, and it is probably one of the harder elements of recovery to attain. Financial sobriety refers to gaining some control and manageability around finances. There are a lot of misconceptions around finances and credit and one of the best tools in recovery is knowing when to ask for help. Instead of becoming overwhelmed by financial obstacles, educate yourself on how you can overcome them.
FICO Score
An individual’s FICO Score is one tool businesses, landlords, dealerships, and other potential creditors use to evaluate the likelihood of you repaying a new debt. Your FICO score is primarily based on your payment history of previously secured debt/credit over the last six years. Three credit bureaus issue credit scores: Equifax, TransUnion, and Experian, and it is not unusual for your credit score to be slightly different at each bureau. The bureaus use five factors to calculate your credit score, but payment history, total available credit, and length of credit history represent 80% of the score.
A credit score is a snapshot in time based on your credit report. Your credit report is an accumulation of how much debt you have accrued (auto loans, credit cards, mortgages, cell phone bills, overdrafts, etc.) and if you have paid these bills on time. Factors that do not affect your credit score are age, income, employment history, education, gender, race, marital status, and home address. While a high credit score can make the credit process easier, it is not the only determinant of creditworthiness. How to Raise Your Credit Score: Review your credit report from each of the three credit bureaus. Creditors do not always report to each bureau, so there are often differences in the score they issue, and errors can be made. When reviewing your credit report, verify your personal information is correct, as well as the outstanding balances and payment history. If you find errors, dispute them online through the bureau’s website. If there is a default and a balance is still outstanding, write the creditor a letter agreeing to pay or suggest a payment plan to satisfy the balance. In the letter, ask the creditor to report the account as “paid as agreed” or remove it altogether once satisfied. The following also help to raise your credit score:
From here forward, always pay your bills on time.
If using credit cards or other lines-of-credit regularly, pay the bill twice a month.
Get a secured credit card that reports to the bureaus.
Under-use your credit cards – never allow your balance to exceed 30% of the instrument's credit limit.
Live on a budget, be patient, and do not use credit unnecessarily.
Save receipts from cash purchases so you can build your own credit report. For example, keep proof of payment when paying with cash for items like housing, prepaid wireless cards, and other purchases you routinely make. Payments like these are not reported to the credit bureaus, so you are not benefiting from them.
Whether you are considered to have good or bad credit, the fact remains, you will always be better off paying for items with cash rather than credit, regardless of the affect on your credit score.
Personal Wealth: Personal wealth goes far beyond what your credit score is. While our society often rates an individual’s wealth on how much money they make or what kind of car they drive, these factors have little to do with personal wealth. True wealth comes from an excitement to get out of bed each morning. If you are excited to get out of bed and into action each day, everything else in life, like an abundance of money, will fall into place. Budgeting: Living on a budget is a discipline that removes stress, chaos, and anxiety from your life. Living on a budget gives you control, freedom, and the foundation to make sound financial decisions and good life decisions when things do not always go as planned. The financial wreckage of the past can create future obstacles and hurdles. Recovery is about building a strong foundation and finding balance in all aspects of our lives and this includes financial sobriety. What can you do today to increase your financial sobriety?
Links to the Three Financial Bureaus:
- Equifax
- Experian
About Choice Recovery
There are several quality Mesa IOP's available to individuals struggling with opioid addiction or any other substance use disorder. If location matters to you, Choice Recovery is located on the Tempe/Mesa border, just south of the 60 and east of the 101 on Dobson Rd. We offer morning, evening, and telehealth IOP services. Choice Recovery accepts AHCCCS insurance as well as main private insurance plans. For more information about our addiction treatment program, please call 480-527-0337 or email us at admin@choiceiop.com.
The Choice Recovery team is focused on individuals becoming who the want to be - their authentic self. Addiction has taken this freedom of choice away by constantly placing negative thoughts about life in the brain. The Choice Recovery integrated whole-body approach helps individuals find the reason they turn to drugs and alcohol when anxiety builds as well as helps them build a foundation to live a life in recovery.