Keith

“Dear Steve,

I am a college student, with bad credit. I have one bank of America credit card that I haven’t used, but it is $1,200 past due because I haven’t made payments. With one more year of college left, I need to know how I can resolve this credit situation.

My college loans do not pass 20,000 for all years of college and they are in good standing. If I pay the entire debt off of the credit card how long will it take to be in good credit standing.

Keith”

Don’t miss our free Get Out of Debt – “How To” Guide Series on a number of topics, for loads of practical advice, tips, and help to beat back debt. – Click Here

The Answer

Dear Keith

I think what we have here is two different situations. First, is the debt and the second is the credit report and credit score.

The credit report and credit score issue is really secondary to addressing the debt.

The bigger problem you have here is the collision of your Bank of America credit card debt and your student loans. Unless you can get your BoA debt paid off before your student loans ask for their first payment in 18 months, you could find yourself in real financial trouble.

My suggestion would be for you to immediately start sending BoA at least $100 a month to begin to knock that debt down. While I’m sure you are getting charged a huge interest rate on that debt right now, the $100 a month approach will make a significant dent in the debt and get it mostly under control by the time you graduate.

If you don’t do this then I see bankruptcy in your future when the student loan payments and unpaid BoA debt collide.

Paying off the Bank of America debt will help your credit report but the negative information about you not paying it will remain on your credit report for 6.5 years from the date first reported.

Steve