The Bad Credit Cycle

UnknownRochelle’s car is again the problem and there is no easy solution this time. The car can’t pass the state emission’s test; it seems to be because of a major problem with the engine. Her car has well over 100,000 miles on it, has had the emissions problem for most of the past year, and will be too expensive to fix. A repair shop said they could give her a current inspection sticker good for one year if she just gets her horn fixed. It doesn’t work either. This is a short-term solution, but it won’t fix the long-term problem.

Rochelle pays $535 per month for the car and insurance. She has an extremely poor credit score and is being charged a 20% interest rate on the car. To make matters worse, she still owes over $5,000 on it. Her first thought was to let it get re-possessed. Instead she has decided to keep making payments on the car and to go ahead with the repair shop’s suggestion. Bad credit has made Rochelle unable to buy a car from a regular dealer with a much lower interest rate. She is unable to borrow money at a reasonable rate from anywhere and currently also owes a total of $500/month to five different finance companies. When she needs more money she re-finances one of her loans with the current places she owes money to. She is locked into a vicious cycle. The poor do indeed pay a lot more for things.

Rochelle comes over for one of her last two interviews tomorrow morning. Her job is going well; she has been promoted into the position she has been training for the last few months. Her managers like her and she seems now to have a more sophisticated understanding of her job and how to do it. She is also taking classes given by the grocery store to prepare employees for further advancement in the company. That is the good news, but how to get ahead in the midst of all her problems is a huge challenge. Rochelle would have a lot more money if she had good credit. Fixing bad credit has no easy solution. It takes paying your bills on time over multiple years. She hasn’t done that in the past, and recently missed two car payments. Her friends tell her that she can just pay some money to a person who “fixes” credit. It isn’t true, of course, and so far she hasn’t been seduced by that scam. The US is full of people with bad credit, and a good number of them come from the middle class. But many more, like Rochelle, come from the underclass. For them, mistakes made early in life, when they had little understanding of the world, few positive role models, no or bad advice, and a complete absence of any family safety net, continue to dog them as they get older and form families of their own, no matter how hard they work to leave their past behind them.

 

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Stormy Seas Again

images-1I thought it was only a matter of time before the relative calm in Rochelle’s life would end; I had been fairly certain it would be either her mother’s health or the breakdown of her car that would cause the stormy seas to break out again; it was the car.

“My safety sticker has expired and I can’t get a new one because my engine light is on,” Rochelle told me. Her engine light had been on for many months and her car had not been working well during this time. She had tried to have her sister’s ex-husband fix the problem; parts had been replaced but the problem had remained. Deshawn, the ex-brother-in-law, had run a computer check when the light had first come on. He manages a quick- oil- change location and has always offered to help. He has also, on occasion, put safety stickers on Rochelle’s cars even though the cars had safety problems. This time, however, Deshawn could not do this for her; people had recently been fired at his shop for doing exactly that; He didn’t want to lose his job.

“I have to get my sticker because Mama drives the car. If the police stop her because of no sticker, she’ll go to jail; she has outstanding warrants,” Rochelle reminded me. Her mother was on parole for welfare fraud and had stopped going to her parole officer long ago. She had also not paid back the money she had gained by this fraud as required by the court. It is somewhat common for people to procrastinate when getting new safety stickers, but Rochelle couldn’t take the risk.

Money, of course, is the real problem. Legitimate repair shops want $100 to run the computer check plus the repair cost, which had been estimated at between $200-$400. Last week Rochelle thought she had circumvented the problem and had paid a man $75 for what turned out to be a fake sticker. She knew it was illegal but thought it would be a real sticker. It wasn’t. Now she is trying to sell this sticker to her uncle.

Rochelle’s life is precarious at best. Currently she has a job and has been promoted twice, but keeping the job requires her children to be cared for and her car to be working. When something goes wrong with her mother or her car, Rochelle is in choppy waters again. A higher income could buy her childcare and car repairs. She is now earning more than she ever has, but it is still not enough. Children are very expensive Rochelle has discovered. She wasn’t able to learn that growing up in generational poverty.

School Crisis Avoided

imagesTwo weeks ago Rochelle had an awful day, and it got worse.  She called me and said her car wouldn’t start; could I please pick her up from work.  Usually that means a dead battery, but I knew she had recently bought a new one. She had gone to work in daylight so she couldn’t have left her lights on.  Rochelle works near where she lives, and it isn’t far from my house.  We first stopped by a convenience store so she could buy a money order for her rent.  It was the first of the month, and there are steep fines for paying late.  I dropped her at her apartment and told her I would see her the next day for our weekly interview.  I wished her good luck with her car.

“Yesterday was the worstest day,” she told me when she came in the door for her interview the next day.  I don’t correct Rochelle’s English because I would be correcting her all the time, and that would stress our relationship.  I think I will correct her the next time she uses “worstest,” however. She uses it a lot, and I think it is such a stigmatized term that it could alter people’s judgements of her.  Her daily life can be hard.   She had found someone to jumpstart her car so it was running, but now she had another problem.  Rochelle had been called by her elder daughter’s afterschool care teacher because her daughter, Kalinda, had been in a fight with another girl.   Kalinda was now suspended from the afterschool care program at least for the rest of the week.  Rochelle was concerned that she might be suspended for the rest of the year.  She had called the teacher and was now waiting to see what was going to happen.  During the week her work was scheduling her so she could be off in time to pick up her children from afterschool care.  She would have to cut her hours if she didn’t have Kalinda in afterschool care.

“I’m going to pull her out of that school.  It’s too rough,” Rochelle told me.  I told her it took two people to have a fight and suggested perhaps Kalinda should have gone to the teacher if the other girl had started the fight.  “What is she supposed to do, just stand there and get beat up?”  Rochelle responded. She now had a possible child care crisis and a car whose new battery had died, though she had no idea why.  Both problems could cost her money she didn’t have.

I didn’t see Rochelle last week because I had gone to visit my sister, Jessie, for five days.  When I got back home from my trip all Rochelle’s problems from her recent “worstest day” seemed to have been resolved, at least for now.  The car had not been fixed properly when she had been in a wreck last April; her trunk could pop open a bit and leave the trunk light on, which drains her battery.  Her daughter had received counseling from the teacher and from the school’s security person, as did the other girl in the fight, and they had to clean the cafeteria from 2:45 until 5:00 every day after school for two weeks.  The teacher said suspending her permanently would cause more problems than it would solve, so she didn’t believe in doing that.  I forgot to ask Rochelle if she was still going to move her daughter to a different school.  The schools in her neighborhood get rougher as the children get older, and Kalinda had started junior high this school year.  Rochelle had mentioned her concern about the junior high school before Kalinda started the school year.

The car will present more problems in the future, and school may not continue to go smoothly for Kalinda.  Next year she will have to attend a different school, any way, because her current one is going to be all boys.  Rochelle is really concerned about that because, she says, the new school, which will be all girls, will mix in some really tough girls from different neighborhoods.  But for now, the car is running, and all three children are in afterschool care.  Most problems are crises when one lives with so little money, and when there is no other adult to help shoulder the chronic difficulties of life.  But Rochelle was happy these problems are resolved for now.