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I recently graduated from college in December. I have some debt, mostly in the way of a few unpaid hospital and utilities bills

I recently graduated from college in December. I have some debt, mostly in the way of a few unpaid hospital and utilities bills and student debt, and...

I recently graduated from college in December. I have some debt, mostly in the way of a few unpaid hospital and utilities bills and student debt, and one very low balance credit card. I am currently working, and I intend to start paying of my debts soon. How soon will it take for my credit to get better if I do this?

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Credit scoring depends on too many factors for me to tell you how long it will take for your credit to improve once you start paying down your outstanding bills.

However, there are several things that you can do which should help improve your credit history. If the accounts that you refer to are already past due, it is important that you pay them off as soon as possible so they stop reporting as delinquent to the bureaus. Paying them off will not clear out the past delinquencies, so these accounts will still have a negative impact on your score, but as time passes, their influence will become less and less.

If you need help with debts, and can't afford your current monthly payments, you can apply with a Debt Relief Savings Quote

However, just paying off these accounts will not ensure an improvement in your credit score. Paying off these accounts will reduce their negative influence, but if you have no other listings exerting a positive influence, your credit is likely to stay in the doldrums. Since you now have a regular income, you need to establish some new credit lines so you can establish positive payment history. Establishing positive payment history can be difficult for people who have had past credit problems.

If you know someone with an established credit history who will co-sign a loan with you, you may be able to obtain a loan and start building your own credit. If you cannot find someone to co-sign an unsecured loan with you, there is always the option of taking out a secured credit card. Secured credit cards require you to deposit cash in an account with the credit card bank. The credit line available on the card is equal to the amount of cash you have on deposit.

This may sound strange; why would you not just spend your own cash? However, these secured credit cards report timely payments to the credit bureaus and help you establish a credit history.

For more information about credit and ideas on how to improve your credit rating, I invite you to read different articles in our credit section.

Regardless of how you decide to work to establish a credit history, the key is to make wise credit choices and timely payments. If you follow a sound financial course, your credit should start to improve in the not too distant future.

Good Luck,


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  • BA
    Aug, 2007
    Thanks for your question, Dennis. Many parents like you find themselves struggling with debt incurred to help a child pay a college education. Private student loans, while essential to many parents who are trying to pay for their child’s college, tend to charge higher interest rates and offer less favorable repayment terms than their federally insured counterparts. The higher payments associated with these loans results in many parents struggling to make their payments, even while their child is still in school. Thankfully, there are several options available to you and other parents in this predicament which may help improve your financial outlook. First, I encourage you to further investigate student loan consolidation options. Based on your question, I assume that you have already spoken with your current lender about consolidating your loan, and that the lender told you a consolidation is not possible at this time. However, a different lender may be willing to consolidate your private student loans, which could lower your interest rate and your monthly payments. can put you in contact with pre-screened lenders who may be able to assist you with consolidating your student loans. If you are interested in exploring this option, I encourage you to submit you contact information to the Student Loan Consolidation Center at Student loan consolidation programs are primarily designed for people with several student loans, but even if you have only one private student loan, a consolidation program may be able to help you by lowering your interest rate, thus lowering your monthly payments. I definitely encourage you to further explore your options for loan consolidation before you give up on it as a viable option for lowering your loan payments. To learn more about student loans, I invite you to visit the Student Loan Information and Savings page at If you own a home, another option you may want to consider is a secured debt consolidation loan. This type of loan is essentially a home equity loan which is used to pay off your other creditors. Secured consolidation loans help many consumers by consolidating all of their debts into a single monthly payment, often with a significantly lower interest rate and monthly payment amount. A consolidation loan may be able to help you resolve both your student loans and any other debts you owe, and could significantly lower your monthly payments on your credit accounts. However, be careful before you borrow money against your home to pay off private student loans, credit cards, or other unsecured loans; you will be converting what was previously unsecured debt into secured debt. This could cause you problems down the road if for some reason you are unable to make your payments, or if life circumstances force you to file bankruptcy, as you may not be able to discharge the secured debt as you would many unsecured debts (though student loans, even private ones, cannot generally be discharged in Chapter 7 bankruptcy). However, secured debt consolidation loans work for many people, so this is an option to consider carefully–the Savings Center, which you will find at the top of each page on, is a great resource to help you find a lender for this type of loan. You may also want to consider the services offered by debt settlement firms. Rather than making monthly payments to your creditors, these programs negotiate lump sum settlements with your creditors, frequently reducing your debts by 50% to 60% of the principal balances. These programs usually take only 2-3 years to complete, so this is a good option for many people who wish to rid themselves of debt in a relatively speedy manner. In many cases debt settlement can also reduce your monthly payment toward your debt. In fact, given that your student loans are private loans, I think that debt settlement may be one of the best options available to you. Unlike federal student loans, which generally will not settle for less than the full balance due, private lenders tend to be much more receptive to settlement negotiations. The fact that you are disabled should provide a settlement firm with additional leverage when working with your creditors, as being disabled tends to make collection of debts much more difficult. I strongly encourage you to look into debt settlement as a possible solution to your financial troubles–visit the Debt Help page at to read more about debt settlement. If you would like a free consultation with one of Bill's approved debt relief partners, you should visit this website: There is one major drawback to debt settlement programs–they will significantly damage your credit rating while in the program and for at least a year or two afterwards. However, if you are currently unable to afford to pay your creditors, the hit to your credit may be worth the benefit of ridding yourself of your debt. A debt settlement program is probably the fastest way to resolve you debts, and once you repay your debts, you should be able to rebuild your credit score through careful management of your credit accounts. I wish you the best of luck in resolving your private student loans and other debts, and I hope that the information I have provided helps you Find. Learn. Save. Best, Bill
  • B@
    Aug, 2007
    when our daughter went to collage, we took out a gov. lone and than we took out a privet personal collage lone for around 30.000, we have been paying 333.00 a mo. for 3 yr,s, we made a big mistake because i thought after a year we could consolidation the lone we took out but for some reasion we cant, not what we were told, now we are stuck paying the lone, she has 2 more years before she is out of school, i am 100% disabitaly and it is getting to a point that it hard to make that lone, is there any way we can do any thing about this. our credit score is up in the 700,s we just need to get where we can consolation our bills of 11000.00 to one payement, please help dennis fox