Credit Lessons from Real Housewives

They argue with their husbands, care for their kids, and pamper their pets. They get makeovers and remodel already-extravagant homes. And they spend, spend, spend. They’re the Real Housewives of Bravo TV’s successful reality series, and watching them offers an entertaining glimpse of living large. If you look beyond the glam though, the “Real Housewives” are just real women – with lots of credit lessons to learn. We spoke to some “real” housewives who found out the hard way just how important it is to keep an eye on their finances.

Clueless about Credit?

Gretchen Rossi, the youngest “housewife” at 32, is a member of the cast of “The Real Housewives of Orange County.” Rossi was a realtor when she quit to care for her fiancé until he succumbed to leukemia. Though he left Rossi a sizeable gift in his will, she contends that as an independent businesswoman who purchased her own home, car, and other possessions, she doesn’t need a man to take care of her – or her finances.

Cassandra Ladd found herself taking the financial reins from her husband early in their 18-month marriage. The 24-year-old public relations agent from Austin, TX, admits she had limited experience paying bills but quickly discovered her groom was in much worse shape. “He went six months without paying his cell phone bill in college. Luckily for us, it was in his mother’s name.”

Ladd switched all bills to her name but has noticed finance charges increase when she made a late payment. “That’s a mistake I only made once,” says Ladd, although she’s unsure how it has affected her credit score because she’d never obtained a credit report. She speculates, “My credit score can’t be good as I’ve got lots of college debt, even though I pay everything on time… now.”

Credit Lesson Learned: Know the Score

Your credit score is a three-digit number that speaks volumes to lenders about your ability to repay a car loan, mortgage, or credit card debt. All scores are calculated on payment history, amount owed, length of credit history, and types of credit used.

The best way to know your own score is to request one personal credit review a year from any of the three main credit scoring bureaus. It won’t hurt your credit, and the results may surprise you. While Gretchen Rossi’s ability to purchase a home and a car indicate that she has a reasonable score, Cassandra Ladd’s youth and the amount she owes are all factors in how she’ll rate.

Budget, What’s a Budget?

Sheree Whitfield of the “The Real Housewives of Atlanta” is a divorced mother of three who appears to juggle her business and social lives with aplomb. But Whitfield’s confession that she doesn’t budget her money did come back to haunt her. When the hefty settlement from her former husband failed to materialize, Whitfield’s mansion fell to foreclosure. Though she managed to send her debut fashion collection down the runway, Whitfield’s financial future may be at risk.

Clarky Davis wasn’t big on budgeting, either. The self-professed “Debt Diva” with a money management blog to match, says, “I was the poster child for poor financial decisions,” buying clothes, shoes, and nights out on credit. It wasn’t long before the North Carolina native had closets full of clothes and $10,000 in debt. But careful budgeting and a strict payment schedule pulled Davis out in three years.

Credit Lesson Learned: Play Your Cards Right

You have to be in it to score. Lenders want to see that you’ve established a good payment history and having one or two credit cards are essential for building a financial profile. Just don’t bite off more than you can chew.

Paying your credit card bills on time each month is a must to keep your credit score strong, advises Davis, noting the goal should be to reduce your debt to available credit ratio. Those payments must fit your budget while allowing you to maintain living expenses without relying on more credit. Davis says, “Payments should be significant enough that you’re whittling down your principal, not just covering interest. Try to always pay more than the required minimum monthly payment and if possible double that payment.”

I Don’t Want to Talk About It

Though Tamra Barney, the 42-year-old stay-at-home mom of four on “The Real Housewives of Orange County” is often outspoken, she and her husband don’t know how to talk constructively about money. The result? Their finances have taken a hit and their decade-long marriage may be on the rocks.

This doesn’t surprise Darshanna Hawks, who knows first-hand how difficult it is for couples to talk about money. Hawks, a relationship coach in Charlotte, NC, says she and her husband did not discuss their finances the first few years. “We lost money due to mismanagement and not tracking anything in the past,” admits Hawks. The couple implemented a “prosperity plan” that Hawks says is a positive spin on a budget. Now she helps other couples navigate their way through these highly charged conversations, and recommends finding a financial advisor or credit counselor. “[Find] someone who has no bias to help facilitate a conversation, go over the what-ifs, and make a plan.”

Credit Lesson Learned: Seek Professional Help

Though the credit problems that land you in the office of a credit professional will be reflected in your credit report, don’t worry about credit counseling affecting your score… it won’t. Even with assistance, it is important to scour your report for errors, keep an eye out for identity theft on dormant accounts, confirm your credit line(s) with creditors, and review your spending habits.

Whether you are affluent or just getting by, draw up a sensible budget, pay your bills on time, and set reasonable financial goals. If you establish good financial habits you’ll be well on your way to maintaining a good credit score.

Credit Lessons from Real Housewives is provided by Experian.com