Q&A: How worried should I be about a credit check? I am a new grad who has terrible credit from too much credit?

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Question by scared2berejected: How worried should I be about a credit check? I am a new grad who has terrible credit from too much credit?
So I recently graduates from college with a bachelors in engineering from a great school. During my sophomore and freshman year I got a bunch of credit cards, used them all up and never paid them. Today, I have a credit school of 490 and a bunch of negative marks and 2 judgements on my credit. I just hired a debt consolidation company to help me to manage (not expunge because I want to take full responsibility for this foolish error) my debt and get it back in order. It is about 30,000 in debt. My big dilemma is that I just got a job offer from a major utiliy company in Minnesota and I am horrified that my job offer will be rescinded despite my excellent degree and background because of the mistakes of my youth. Am I being paranoid or realistic? I have spent years cultivating my background ot make myself the ideal candidate in every other way. I have spent time overseas learning new languages, lots of technical jobs, held leadership positions and founded community service organization and I feel like if I am turned down because of my credit, then my degree is worthless and I might as well work at McDonalds. I do not feel I am entitled to a job or a hig hsalary or anything because I went to college but how am I ever supposed to fix this issue if no one will hire me to make enough money to fix my credit?
The job offer has not be rescinded but I am worried it could be because of my poor credit. I was up front about it and explained my background to the hiring manager but he said he is not that worried about it and the ywould really like to have me
The company I hired was a debt management firm they basically just call the creditors to negotiate down my debt and then agree to a a certain monthly payment for each. I did not get a loan because I have heard they are a bad idea. I just wish I was smarter earlier own but it wasnt until the end of my college career than I started to understand credit cards and debt which was my fault. I want to pay off the debt because I feel so guilty about not paying these people their money when I know I owe them
Yes, I have a college degree and while engineers are historically bad at english and grammar, I was not really worrying about spelling mistakes when I typed this

Best answer:

Answer by SlimMick
Per your update…if this is a “debt settlement firm,” you’re only making matters worse for yourself….

What you need to know about debt settlement firms:

Your credit card companies are not going to offer you settlements like 50%, for example, if you are current (not behind) on your payments. If credit card companies offered settlements to people who are current on their payments, then everyone would be calling them up and asking for 50% settlements. Basically, the only way you can get into a position to negotiate settlements is to deliberately let your accounts go into default. This is exactly what debt settlement firms do….They take a monthly amount from you and use that to build a “settlement” account, which will go towards paying the “settlement” at a later date.

These firms specialing in letting current accounts deliberately default to put them into a position to negotiate settlements. If I understand your posting correctly, your accounts have already defaulted. You don’t need to hire anyone to negotiate for you. Make your own settlement offers…you can do this on your own and it puts you in control. If you do…get all settlement terms IN WRITING PRIOR to paying them.
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490 is for sure a really bad credit score….NO firm that you can hire can fix this score overnight.

FYI: When credit cards default and are charged-off, the damage is already done and there is bascially no undoing it…it stays on your credit report for 7 years…..paid or unpaid….I don’t think that getting a consolidation loan for $ 30K to pay off old defaulted debt is going to help you that much.

Don’t make the mistake of simply cutting a check to whatever collection agency has the debt for the charge-off and assume that your credit rating will be magically restored…Doing so will not remove it from your credit reports. It will simply be updated to a “Paid Charge-Off,” which, while slightly better, is still a seriously derogatory item. Per the Fair Credit Reporting Act, a charge-off, whether paid or not, can remain on a consumer’s credit reports for up to seven years.

Bad credit does not last forever..and even though the items will remain for 7 years..that does not mean that you will have horrible credit for this entire time…Usually, after 2 years…your score should start to go back up…assuming you stay out of trouble. Don’t assume that have bad credit will preclude your getting a job in engineering….If you were applying for an accounting/CPA job….your credit score would be devastating…but it should not kill your chances of getting a job in your field.

If you’re going to pay off old-charged-off debt anyway, then you might as well negotiate the lowest settlement you can possibly get, being that the negative charge-off notation is going to stay for 7 years on your credit report anyway. Negotiate the lowest, rock bottom settlement you can get,…start at 25%. You have to be VERY careful in this effort…Mail them a vaguely worded statement like:

I am willing to settle this matter for 25% of the original amount. This is in no way an admission of this debt, but rather an attempt to settle this matter. Your firm must send me a written agreement on your company’s letterhead that you will accept this amount as “payment in full” and that is issue will be settled. Upon receipt of this agreement, I will mail you a money order for this amount.
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* Get all terms of any settlement deal you reach with debt collectors IN WRITING BEFORE you give them your money. Never accept settlement deals over the phone…The debt collectors will deny that any settlement was ever made once they get your “settlement” money and will come back demanding more money.
* NEVER, EVER give out your checking account numbers to debt collectors for making payment

Know better? Leave your own answer in the comments!

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