Any advice for those with bad credit applying this next cycle?

[lola13]

My credit is totally f--ed.  I won't get into the sob story, but my credit cards got out of control so I enrolled in a debt management service last year.  I thought this would help my credit but so far it hasn't.  I already work 2 jobs and pay as much to my credit cards as I can, but I make less than 30K and I have student loans on top of this, so it's barely make a dent in my CC debt.  Does anybody out there have any advice on how to clean up my credit before I have to apply for a private loan?  I am hoping to attend a T14 in the fall of '06 and assuming I don't win the lottery between now and then, I'm going to need to borrow quite a large sum.  Any ideas or advice would be appreciated.

[Are we there yet?]

Order your credit reports and check for errors. Pay down your balances as much as you can, but do NOT close any accounts. Obviously make sure all future payments are made on time and for greater than the minimum amounts due. Try and pay down the highest interest rate balances first. Avoid balance transfer offers based on short-term incentives (i.e. 0% interest for a year, then 9% after that or something similar). Unfortunately there is no magic formula, but after all that is the point. Also remember to keep it clean once you get it clean...employers will often check your credit history prior to making any offers. 

[dbgirl]

Lola, I was in exactly the same situation you were in -- in my case, going to a debt management agency was the BIGGEST mistake I EVER made.

When I went through debt management, my bills were current, I just owed a lot of money at high interest. Anyway, this place basically paid my bills sooooo slowly that my credit ended up littered with 30 and 60 day late payments. And even though I tried to explain this, my creditors refused to make adjustments on my report.

Long story short if you are not working with consumer credit counseling then don't do a debt management plan.

The only real "fix" is to pay everything on time all the time. If you are short, then hold off on the cable bill or the cell phone bill (assuming you have those) -- NOT your credit cards.

The longer it has been since you have made a late payment, the better. And if you can make two years without late payments, your score will jump substantially.

In my case, I'm starting school first and applying for private money in September. By then, it will be two years since the "situation" and my score should be really high.

[lola13]

Thanks dbgirl.  It's nice to know I'm not doomed just because I made the bad decision to go with a debt management agency.  They've ruined my credit and now I'm terrified I'll get into my dream school and then have no way to pay for it.  Thanks for the advice!

[be10dwn]

I had really bad credit about ten years ago.  I did everything "right" since I got married six years ago and it has taken me literally the entire time for it to clear up.  I couldn't get any kind of credit when I started, now my score is like 750 or something.  Keep your head up, it's not gonna happen overnight, but this too shall pass .  As far as loans go, you will definitely have to find someone to cosign for private loans.