Strong Credit Paves the Way to Re-Entry
At 17, Jaime Hauad says he entered prison for a murder charge, which he fought, eventually earning him a drastic reduction from his initial two consecutive natural life sentences. Twenty-two years and nine months after being locked behind bars, he re-entered mainstream society a “blank slate,” he says.
“I had no credit, I had no car. I had no job,” the 41-year-old Chicago resident remembered.
He knew he needed to re-establish himself, starting from a foundation of self-determination.
“But I didn’t know how,” he said.
He remembers well, the exact moment he heard about the credit building services at Working Credit. He was standing at the bottom of the stairs in the Chicago Furniture Bank’s warehouse, where he had landed a job as a delivery man. It was the middle of the afternoon and someone yelled out that there was going to be a credit building workshop for the employees.
Until that point, Hauad had tried to figure out the credit system on his own, making all kinds of mistakes along the way – from opening up credit cards and then maxing them out, to paying an infamous “credit repair” company a monthly fee to help him raise his credit score.
“But none of it worked,” Hauad said.
“Dumbfounded” by a system he knew almost nothing about, he watched his credit score skyrocket into the 700’s, then unexpectedly plummet into the low 600’s, due in part to maxing out his credit cards, as well as applying unsuccessfully for 23 different rental opportunities. Landlords, he later learned, often run hard inquiries when they check prospective tenants’ credit reports. (A hard inquiry can reduce a person’s score by as much as 5-10 points.)
“I admit I had a sour taste in my mouth about the credit system in general,” Hauad said.
But as Hauad would experience with the help of Working Credit, the algorithms that produce a good credit score – which in turn provide low interest rates for car loans and mortgages – don’t care about past convictions. In fact, a good credit score is one of the only non-discriminatory achievements that a person can make upon his or her re-entry into mainstream society.
Hauad describes his frame of mind in his initial re-emergence this way: “I desperately wanted to be like the people around me – people who actually owned things, people with the ability to steer their lives in the directions they wanted to go.”
So when someone yelled from the second floor of the warehouse that there was going to be a credit building workshop for the employees, Hauad did not hesitate.
“I raced up the stairs,” he says.
THE RIGHT INFORMATION
Like many who seek support from Working Credit, Hauad grew up in a marginalized community in which access to sound financial information and non-predatory financial institutions was severely limited, or even non-existent. His mother worked as a telemarketer and house cleaner while raising three boys single handedly in the Chicago neighborhood of Logan Square/Humboldt Park.
“So our only way of learning was the schools or the streets,” Hauad said. “And they didn’t teach you about credit cards in the schools.”
One of the most critical pieces of information Hauad learned: That keeping credit card utilization rates below 30% can significantly bolster a credit score.
“They (the credit card companies) don’t tell you about the downside – they don’t educate you,” Hauad said. “They just approve you and give it to you.”
When he sat in that Working Credit workshop in August of 2019, he learned so much, he says: For example, the things that a “credit repair” firm had charged him a monthly fee for – specifically, disputing negative information on his credit record – could have been done for free or with the support of a Working Credit counselor.
After the workshop, Hauad signed up to work with a counselor for a year. Through that relationship, Hauad’s counselor paired him with a credit building product that allowed him to put a small amount of money into a locked savings account every month – helping Hauad to further establish his credit while growing his savings.
Today, a year later, Hauad’s credit is up nearly 100 points – to a prime score of 744.
He owes only $99 in credit card debt. He lives in a three-bedroom apartment by himself. And he owns a shiny black 2021 Chevy Equinox. He’s also shopping for a house.
FINALLY – FINANCIAL SOLIDITY
“Now that sour taste is gone,” Hauad says, his voice full of confidence. “I feel really blessed to have worked with Working Credit.”
“I established myself,” he says smiling. “I only make $560 a week but I went above and beyond.”
These days, instead of rejection letters, Hauad receives offers for credit in the mail nearly every day. He just passed his test for his Commercial Drivers License and is a driver at Dean’s milk company in Illinois. Every morning, he puts on his steel toed work boots and grey work uniform, and every night he writes down the dates his credit cards are due – and he pays them early, he said.
“Do you see the glow on my face?” he asked enthusiastically. “I now have the peace of mind that I deserve.”
LEVELING THE PLAYING FIELD
Ways Credit Building Can Help Returning Citizens
CREDIT AND HOUSING
Three out of four incarcerated people are rearrested within five years, according to Abigail Stevens in her research published in 2019 by the Public Justice Review.
While there are several contributing factors to recidivism and successful reentry, a home not only provides shelter, Stevens points out – it also gives the returning citizen a permanent address in order to apply for jobs, receive mail, promote community, and provide a space for families to reconnect and reestablish relationships.
The obstacles to stable housing, particularly in the private sector, include landlords who do not want to rent to people with prior records. Ten to 20 percent of returning citizens will become homeless at some point, Stevens shares in her research. Those who do become homeless are 11 times more likely to be reincarcerated.
Landlords often take credit scores into their overall decision to approve or deny a prospective tenant’s application. Strong credit can mitigate the negative impact of a criminal record, helping to ensure long-term housing.
Returning citizens face a great deal of overwhelm in starting their lives over and are vulnerable to predatory lenders, and “credit repair” and “debt relief/settlement” agencies that charge exorbitant fees for services that often cause long-term and debilitating harm.
Working Credit educates and supports clients in sound, affordable credit practices, thus empowering people for the rest of their lives.
Returning citizens often have no credit history. If they do have a score, it’s often due to a third party’s misuse of their Social Security number while they were incarcerated.
Credit building, customized to a client’s needs, can overcome those obstacles and build a strong score in as little as six months.
A CRITICAL NEED
In America, the Black imprisonment rate at the end of 2018 was more than five times the rate among whites. Meanwhile, Hispanics comprised 16% of the population, yet accounted for 23% of inmates, according to a 2018 Pew Research report.
Our credit building counselors are experts in evidenced-based credit practices and are passionate about sharing this information.
For more information about Working Credit, contact Kristin Schell, Chief Program Officer at firstname.lastname@example.org or 314-252-8342.