Detroiters with damaged credit scores tell Crystal Nickson a few common scenarios on how they ended up so financially challenged.
“Everything was great, and then I lost my job,” she said some say. “Everything was great, and then my Mom died.” Others lost their homes in the mortgage crisis in 2008-09. Some had good jobs but lost the life savings built up in retirement accounts after the financial meltdown slashed stock prices in half.
Nickson, 37, sees those heartaches as legitimate financial challenges. But in her opinion, they’re hardly valid reasons to sit back and do nothing about rebuilding your credit score or dealing with debt.
“As for me, I used to sleep on a dirty, soiled couch in a crack house,” says the young woman in black-and-white “Straight Outta Debt” T-shirt.
Nickson is blunt. She says she wasn't doing drugs but knew someone who let her stay on that couch when she was in her 20s and needed a place to stay. She slept on the living room floor near the front door at the home of a girlfriend, too. Sometimes, she said, she even slept in her car.
She's now a financial well-being coach for Operation HOPE, based out of a one-desk office in the Northwest Activities Center on Meyers Road in Detroit. The office, which opened in 2015, is a collaborative effort with the financial empowerment nonprofit Operation HOPE, Fifth Third Bank and the City of Detroit through Bank On Detroit.
Operation HOPE provides free one-on-one credit counseling services at all HOPE Inside locations and over the phone. Certified counselors identify trouble spots with credit reports, debt and budgets.
“When you talk to people about their money, they’re already uncomfortable,” Nickson said.
So over time, she has learned that it’s OK to share some of her own financial struggles when she conducts workshops or meets with people in the community.
“The first thing I tell people is my story,” she said. “My mother died when I was 21, she was the breadwinner. And when she died, we were evicted.”
Initially after her mother died, Nickson was able to get an apartment but she wasn’t able to keep it for long. Somehow, she owed DTE Energy more than $2,000 — bills that were racking up when she was in grade school.
She discovered that her mother had put the utility bill in Crystal's name to use the young girl’s good credit score. Other parents have gone that route, too.
“They do that because they’ve ruined their credit with DTE.”
The child ends up with a miserable credit history when the parent doesn't pay the bill after fraudulently using the child's identity.
DTE Energy said it works with law enforcement agencies or may pursue legal action against those committing the fraud. But, it said, fraud situations between family members are more difficult to investigate and resolve.
This year, DTE implemented new controls to help prevent these situations from occurring by requiring customers to answer additional questions to validate their identity when requesting new service, said Stephanie R. Beres, manager of media relations for DTE Energy in Detroit.
Nickson's damaged credit put her on the streets of Detroit.
"For a while, I slept in my raggedy blue car," she said, keeping clothes in her trunk. Or sometimes, she'd visit the home of a friend or family member to find shelter. "I would just randomly pop up on your porch."
The unpaid utility debt stayed on her credit report for seven years. "Thank God my husband had decent credit when we moved in together."
Eventually, she ended up marrying a young man whom she'd had a crush on in the seventh grade. The couple has a 12-year-old daughter, Jessie.
"I"m happy that everybody who told me 'No' told me 'No,' " she said. "It made me have to work harder."
She started to realize that she had to find a way to get out of the mess. She graduated from Ecorse High School in 1997 and went to college at Eastern Michigan University but didn't take college all that seriously.
"I didn't go to school to learn. I went to school to get away from where I was at," she said. She spent two years at EMU and ended up with a large amount of student loan debt — loans that she couldn't make payments on until she was in her 30s.
Besides marrying a man with good credit on Valentine's Day 2004, she got on better financial footing after she decided she would go to Baker College to get an associates degree and then study accounting. She remembers one teacher who encouraged her to keep pushing herself.
As part of her professional growth, she volunteered to do taxes for lower-income families and later worked for the Wayne Metro Community Action Agency. She started her own business to help those with small businesses learn how to manage their books. And then she began working for Operation HOPE.
"She's more than qualified for the job," said Ryan Mack, the Michigan market president for Operation HOPE in Detroit.
Operation HOPE's goal is to build a movement of financial responsibility, self-sufficiency and accountability.
Taking time to rebuild a credit score, he said, means you can better avoid high-cost check-cashing stores. Learning how to budget gives you a better shot at avoiding high-cost payday loans.
"It's very expensive to be poor," Mack said. "We've got to learn what we can control."
Too often, though, those involved with financial literacy have a dogmatic approach that doesn't give much room for the consumer to consider how to tackle their financial troubles, he said.
"By telling her story, it just clicks," Mack said.
As a financial well-being coach, Nickson said she understands how it's sometimes easy to fall into financial traps. But many times, people don't even know their options, particularly with student loans.
Detroit residents who graduated from a Detroit high school in the spring of 2016 can now attend community college for two years free, thanks to the Detroit Promise Zone Program, she said. Couple that with good grades to transfer and apply for a scholarship at a four-year university, she said, and you could limit your debt or even avoid debt entirely.
"My interest on my loans is almost as much as my loan balance," she said. She owes more than $90,000 in student loans.
She tells people that they do not want to hide from their student loan bills. By defaulting and not making payments, they're hurting their credit scores.
She noted that there are options to work out lower payment programs with federal student loans. By paying federal student loans on time, some people can rebuild their credit over time — maybe enough to later refinance a car loan to a lower rate. If you're defaulting on student loans, you cannot refinance a 15% or 20% car loan to a lower rate.
"People's car notes are my rent," she said.
It's not uncommon, she said, to see people paying $500 or more a month for a used-car loan, loans that carry high rates because consumers obtained the loan at a mom-and-pop dealership on the corner.
Or she might see some people who are unemployed dealing with rent payments of $1,100 or more.
"My rent isn't $1,100, and we both work," she said, referring to her husband. "I'm like 'We need to find you somewhere cheaper to live.' "
Operation HOPE opened a HOPE Inside office to provide free credit and money management coaching in TechTown Detroit in October. The partnership there involves Level One Bank, Wayne State University and the business innovation hub TechTown.
Another HOPE Inside office is at Cody High School and involves a collaboration with the Skillman Foundation. Operation HOPE received funding from the Detroit Medical Center to open an office out of Sinai Grace Hospital to provide financial counseling for DMC employees at all campuses.
One of the popular programs is the HOPE 700 Credit Score Communities initiative, in which people work to build their credit scores to the 700 level.
"Detroit is typically a 500-credit-score community," Nickson said.
Sometimes, it's necessary to dispute old debts that don't belong anymore on that credit report. People have to focus on how they're spending their money, as well.
"Most of it is behavioral. Everybody wants to be heard and seen and validated," she said.
She recalls meeting one woman who had a refrigerator in three rooms, plus a deep freezer.
"She was a couponer. She stockpiled," Nickson said.
After talking some time, the woman opened up about a time when she was a little girl and her mother didn't have enough money at the register to pay for groceries. They had to leave the food and walk out of the store.
Nickson said she fell into bad habits once she got a steady job, too. She was happy she was making money and liked to throw parties, including renting out rooms at a hotel.
"I'm not poor anymore. Look at me. Look at what I can do," she said. "Look at me. I'm paying interest on credit card debt from 2011."
“Yes, I’m a real person. I’m a credit counselor. I’m not a millionaire,” she said. "Hey, I'm Crystal. I've been there."
Contact Susan Tompor: 313-222-8876, firstname.lastname@example.org or on Twitter @Tompor