Mastering the Art of Managing Credit

Shameka Gainey went from a
credit score in the low 600s to a
credit score in the high 700s.

Call Shameka Gainey obsessive about her money, and she won't deny it a bit. She masters her accounts like a conductor of an orchestra, cueing a percentage of her salary to go to emergency funds, to retirement, to her personal weekly allowance, all so she can hear the sweet sound of financial stability. Cha-ching!

"I'm constantly calculating and re-evaluating," says the 30-year-old attorney, who practices general civil litigation and white collar criminal defense in Washington, D.C. where she recently bought a condo. "I know where all my money is at all times."

But Gainey's finances weren't always in tune.

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In college and later law school, she counted on easy-to-get plastic to pay for groceries, healthcare bills and other necessities. With little to no income, and no able family members back in her native Rochester, N.Y. to lean on, she only made minimum payments to creditors, continuously racking up bills in the process. On one credit card, her balance grew larger than her credit limit. By the time she passed the bar in 2004, Gainey had $12,000 in debt hanging over her head. She wouldn't feel the full weight of it until she learned her credit score.

"I was 25 when I first saw it. It was in the very low 600s," she says. "That's when I hit rock bottom." To her defense, Gainey said she had no examples of how to manage money growing up. All of her family had bad credit, she says. "Everyone who had a car needed a co-signer."

Then a friend introduced her to a best-selling book by financial guru Suze Orman, and it filled in the gaps. "For the Young, Fabulous and Broke changed my life," she says. "When I closed that book, I had a strategy for getting out of credit card debt."

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There, the mission began, launched in large part by Gainey landing her first real job at a law firm earning a real salary. She buckled down financially, bringing her lunch to work everyday, depriving herself of vacations and personal treats, and she used the power of direct deposit to control where her money went. In less than three years, Gainey paid off her credit cards and her car. But she didn't stop there.

"I pretended like I still had the debt and the car payment, and I transferred that money into my savings," she says. "I had never stopped paying in my head. Sometimes you have to trick yourself."

Today, her credit score looks more like 777, which she happily showed off last year to snag a good rate on the mortgage for her condo.

Other strategies to keep her on track: In her wallet, Gainey carries one MasterCard, which must be paid off by the end of the month, similar to an American Express. "That's how I maintain my credit. I only put on it what I can pay. So, if I charge $5,000, I better be able to come up with $5,000 in 30 days!" Gainey taps a debit card for groceries and stores an emergency credit card at home.

"Once you've gotten out of debt, you don't want to be back in," says Gainey, who now shares her money-saving tips with friends. "I worked so hard, that I don't want to be that way again."