When Past Transgressions Attack!

March 27, 2006 8:31 AM

LawSchoolLoansFilter: As most undergrads do, I've got a few small blemishes (and one large one) on my credit report. I've gotten into school, but I'm paralyzed with fear to even start on my private loans. Am I being stupid, or am I right to be frightened?

I can't imagine I'm the only person on the face of the earth who needs to procure private tuition loans for law school who's had a few missteps on their credit score.

The story: I have been very active with my credit since I've had the ability at the age of 18. I have had two signature loans, 6 credit cards, a few cell phones, deposits for water/gas/electric, etc. However, almost two years ago exactly, I decided to move out of the country to be with my fiancee (now wife). The move was hasty, poorly planned, and ended up with me completely screwing a couple of companies on my last payments - namely my cable company, a cell phone provider, and a signature loan for approx $6k. Prior to this, I'd missed ONE credit card payment, and was 30 days late a couple of times on a signature loan another time that I moved (this was almost 5 years ago, now).

Since then, I've moved back to the states - and I ran my credit report to see the dammage. I've contested the cable chargeoff (and it was removed), and have since settled with the cell phone company and began payments with the signature loan. I've never missed a student loan payment, have secured a credit card which I pay off every month, and bought a car in the last year (with my dad as a co-signer). All of these things I have been spotless with, either making multiple payments each month, or paying early.

My concern is that any private loan company will LAUGH when I try and apply - even though I've cleaned up these small things, at one time durning my serious screwup, I was 180 days late on the signature loan.

I'd get a copy of my credit report, but it just contains all that I told you. I can't read a FICO score, and for damn sure don't want to give some company $50 to tell me what I or you (may) already know.

Am I being stupid? Should I just go ahead and give Sally Mae a call and see if they'll approve me? My only worry lies with the signature loan - which is basically what I'm asking these institutions to do; hand me roughly $75k over the next three years on nothing more than my word.

Oh, and my parents are tapped for cosigning. They can't help me if I need them.

Any ideas?

posted by plaidrabbit to work & money (11 comments total)

What do you mean when you say, "I can't read a FICO score"?
posted by SeizeTheDay at 8:41 AM on March 27, 2006

Actually, student loans aren't exactly like signature loans. Student loans have a lot more legal protection for the lender, so they're easier to get.

You don't have anything to lose by seeing what happens... my guess is that you'll be okay.
posted by I Love Tacos at 8:43 AM on March 27, 2006

How long has it been since you've started paying all your bills on time again? Your credit is weighted towards your current actions. If it was more then a year ago, you're probably already starting to reap the rewards of fiscal responsibility.

The credit report you got for yourself: was that a long time ago - more then a year? It's worthwhile to get another one: you can make sure that your good behaviour is having an effect, and that they're recording everything correctly.

Remember: lending institutions make money off of loans. They WANT you to borrow their money. They will do everything in their power to help you. Don't feel bad asking for it. The simple way to resolve your doubts is to apply for a loan.
posted by voidcontext at 8:46 AM on March 27, 2006

Also, the biggest red flags are having any account currently deliquent, charged off, or brought as a judgement against you. You don't have any of those anymore. Don't beat yourself up too much, you've done the right things to make good on your mistakes.
posted by voidcontext at 8:50 AM on March 27, 2006

I was in the same boat as you about a year ago; BankOne has a private loan for law students of up to 30K that doesn't require a cosigner if you can prove you've been employed; I believe BOA has a similar loan. Back when I applied a year ago, the info floating around on the law school discussion boards was that minimum FICO to qualify without a cosigner was 640, although none of the loan people would give me a specific number when I'd asked.
There are a number of services online where you can buy your FICO score.
posted by Dr. Zira at 8:50 AM on March 27, 2006

Sallie Mae will give a student loan to a ham sandwich, as long as it continues to make satisfactory progress in an accredited degree-granting institution. Really the student loan industry is built on the assumption that a student will have weak or no credit going into school, and the probability that student will have better income coming out of school.
posted by KirkJobSluder at 8:51 AM on March 27, 2006

You have to pay to get your FICO score, and the formula used to divine it is secret.
posted by delmoi at 9:41 AM on March 27, 2006

Check with your school to see if they have a "preferred lender." The schools often enter into these agreements, and the lender will work closely with the school, making it much easier for you to navigate the confusion.
posted by MrZero at 9:54 AM on March 27, 2006

You have to pay to get your FICO score

Some credit cards give you your score for free. Providian's do, for instance.
posted by kindall at 9:55 AM on March 27, 2006

Well, someone needs to pay for it.
posted by delmoi at 11:18 AM on March 27, 2006

Alright...I ran my credit report last June - and that's when I fixed everything. I knew that I was going to be trying to attend law school, so my first instinct (besides study for the LSAT) was to fix these problems.

As for not knowing how to read my FICO score - why would you even want to know? I mean, from what I understand, nobody will tell you a hard number as to what qualifies you and what doesn't. Just seems like a waste of cash.

Thanks for everyone helping. I'm gonna try and just apply and get it over with.
posted by plaidrabbit at 6:26 PM on March 27, 2006