Finally after five years from graduating college, I have finally begun my career recently which I plan on staying with for the next 20+ years until I retire. It’s a civil service career, so it’s a “safe bet”. Over the past few years since college, I worked a lot of horrible and bad paying jobs, which in turn impacted ability to pay bills, and also my credit.
Currently my credit score is 579 (went up 15pts in last 3 months, woohoo!) . I have $29,000 in college loans that I have been deferring over the years (and won’t have to make a payment on until October.) When these loans get off deferment, my minimum payment will be around $375/month.
I also have a $7,000 loan from Sallie Mae which I defaulted on, and a $2,500 Perkins loan thru my college which I also defaulted on. Thru research, I’m aware that I can pay a portion of these loans (about 75%) as a lump sum payment to have it gone forever. Talking around $7,000 to pay off almost $10,000 in defaulted loans. Originally these loans were for $3,000 and $1,500 (damn I’m so stupid for not just making the minimum payment on these!!) It’s my goal to have this amount saved in a year to pay these off, or if I’m able to take out a loan to pay these (if possible?) so these can get off my credit report.
Other than this, there is nothing else on my credit except for two things that went into collection that totaled $1,000 that I just paid off this weekend.
My new career will pay me about $60-65k on average over the next two years, and about $75-80k on average for the three years after that, and about $125k after year 5 when I reach “top pay”. My deductions (taxes, pension, 401k, union dues, etc.) are about 40%; therefore my take-home is about 60%.
My current monthly bills are rent, cell phone, car insurance, cable, gym, gas, and food which I would estimate to be around $1,800-$2,000/month.
It’s my goal to within 2-3 years to buy a condo, and I want to improve my credit as much as I can with a decent down payment. I plan on going thru the FHA for this condo/co-op.
So my questions are mainly this. What can I do to improve my credit these next couple years? Would it be possible to take out a loan to cover the defaulted loans so they can get off my report fast? Any suggestions on anything to pertain to my situation? Any help is greatly appreciated, thanks!