bad credit anyone??

[primetime]

Well I finally managed to get accepted to med school and now I'm having trouble getting a private loan. I managed to screw up my credit in college for 3 years, but for the last 3 years I have had excellent credit and have really tried to fix up my report.
Has anyone out there been in a similar situation and if so, could you point me in the direction of some lenders that may work with someone in my situation?
thank
PT

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[Colorado_2]

You might be able to hook-up with some banks in Haiti and borrow against your kidney or liver.

 

[Annette]

Primetime, have you checked your credit rating? You can get a free copy of your report from TRW, Experian, etc. if you were turned down for credit. Check to make certain that what is on the report is correct. You can challenge anything that you believe is not correct on the report. If the company that placed the report does not verify the information within 30 days of your challenge, the credit reporting company has to remove the inaccurate information from the report. Office supply stores often have "credit repair" kits that will guide you.

Also, check with the lender. Sometimes, if you have a reasonable explination for the problem (faulty goods, etc.) the lenders may reconsider your application.

Hope this helps.

 

[Winged Scapula]

Annette has given some excellent adivce. In addition,have you tried applying with a co-applicant (ie, usually your credit worthy parents)? Lenders may be more willing to take a chance if you have a co-applicant who is willing to take responsibility if you don't make the payments.

The following is by no means meant as a dig at you: this is a good warning to others with potentially bad credit. Please try and clear it up BEFORE applying because as this poster shows, it CAN be a reason why you would be unable to go to medical school. Schools will say that finances will never prevent someone from attending their school; however, IMHO they are talking about people with good credit. If you can't qualify for alternative loans, you may be out of luck (and out of medical school).

Best wishes...

 

[Krazed_Medic]

I have worries about this subject myself. Seeing as how I screwed up my credit a long time ago, and it doesn't seem to get any better, I'm really worried about financing my education when I get into a med school. Its kinda funny, cause I'm not worried about getting into a med school. That seems to be most of the problems that I've read here. I"m fairly confident that I'll be able to get in. Hopefully, something will work out for you! Congrats on your acceptance!

 

[Winged Scapula]

Originally posted by Space Monkey:
•There is some bad advice being given out here. Do not worry about clearing up a bad credit before thinking of applying, this is just plain insane. Getting in is the hard part, getting money is the easy part. Don't listen to these people who tell you to waste YEARS of your life just pay off debts so you can just take on a over a 100G's more. Also the govt is giving you 38.5 a year so you will not need a credit check for this, I mean for real when has the govt ever cared about getting the most bang for their buck. They could care less if you are a high risk. For real man, they friggin spend gazillions on luxury outhouses in our state parks for christ sake.•

Although obviously a troll, I will clarify on the off chance that you might not be. We are NOT talking about US government loans. MANY schools have such high tuitions that the US government loans are NOT enough to cover tuition and living expenses. Therefore, most students must rely on alternative loans. Loans which require a credit check, loans which you may not qualify for should you have bad credit. Any medical school will tell you this. As a matter of fact, some medical schools are requiring credit checks as part of the application process as a direct response to this type of situation.

You may not have to totally pay off all past loans (no one here was suggesting that) or accounts, but you should make sure that you are attempting to clear the matter up before you apply (ie, by making a payment plan), lest the above happen to you. Just ask your school of choice what they advise you to do.

 

[BlueFalcon]

Hey Medic,

Annette is correct, at least technically. If I were you, I would not challenge anything unless I knew for certain it was erroneous and could prove it. First of all, it's no problem for the company that reported the info to respond in 30 days. Don't count on them to drop the ball. They probably won't. Secondly, info stays on your report for 7 years after the last activity relevant to that info. A company's confirming info that you challenged could constitute "activity." Presto, you just bought yourself a brand new seven years.

A good approach is to contact the creditors who have posted the info, particularly if you still owe them money. They can be receptive to having the info deleted for full or even partial payment of what you owe. Also, if you've never paid them what you owe them, they can always re-report you since you still owe them. Again you get a brand new seven years.

Good luck

 

[Annette]

BlueFalcon, you are wrong about the activity! The date used for the 7 year mark is the date the reason the account was posted-ie. the account was 30 days late on . . ..

You are right that most companies will respond within the 30 days, but if the information truely is in error, they will should fix it. If you still think that the information is wrong, you can add a statement.

You are also right that some creditors will work with you. If you had a bad patch, and have been paying on-time since, they may be nice and remove the report, but expect this to take quite awhile. Also, some companies will remove the report if the debt is competely paid.

Good credit doesn't mean no debt, it just means that you pay on-time.

 

[EUROdocMOM]

I also have bad credit, and hope it won't affect my chances of getting acceptance to med school, but I am most likely going to try for the HPSP through the military.
I don't want to have med school debt(nor do I think I will be given a loan!), so I'm willing to join any branch of service!
Does anyone know if the HPSP will reject a person for bad credit?...Now I'm really giving myself an anxiety attack!!!!

 

[pcl]

Originally posted by Space Monkey:
•If this is the case where he is accepted or will be going to a private school with higher then 38.5 tuition I still do not see a problem. Almost all private school sets aside funds from alumni donations and such to specifically deal with these problems of finance. Thats why they have a financial aid office. How do you think all these disadvanteged students manage to complete med school with having a poor credit history or no credit history? I'm telling you, once you're in they will find a way to get you money.

What schools are really trying to do when they tell you they want to do credit checks for application is to make all the rich kids have mommy and daddy pay off their debts so the school based resources can go to the right people who really need it.•

But if the way that they "find" you the money is in alternative loans, you could be in trouble without a good credit history.

Speaking only from personal experience, I had a wide discrepancy in the financial aid offers from three schools (all private), ranging from 20K to $1800 in university based grants & loans. Cost of attendance at all three was close to 50K. 50K-38.5-1800 = 9700 in alternative loans.

This particular school stressed that I would have to be credit-worthy or get a credit worthy co-signer as they did not have the means to assist me further. In fact, all three FA offices stressed the importance of being "credit-worthy"

And, just for the "rich kid situation", what about the case of the student who has parents who have the means but choose not to support them through school. According to aid offices, the parent's contribution keeps them from qualifying for university aid... Alternative loans make up the difference.

Come on, financial aid, just like the application process, doesn't have a one size fits all answer. Cleaning up your credit is a wise move and doesn't take years to do, just a little time, persistance & legwork. It *could* even help when you go to apply for funding for a PRACTICE or a HOME someday.

 

[Dr. Van Nostrand]

Let's face it - there isn't 1 rule which applies at every school. I've heard tell of students not being allowed to matriculate (ie, acceptances pulled or at least deferred) when they couldn't qualify for alternative loans; the schools didn't offer them any loans from their resources. A friend of mind told me that at least at 1 foreign school they require a good credit rating because they don't offer any assistance to students so you have to fund it all yourself with US loans (I think the foreign schools can only get $18,500 in Staffords) and alternative, credit based loans.

Obviously these are just rumors and might not be true, but I don't think its bad advice to clear up your credit record as much as possible before applying JUST IN CASE this does happen.

 

[Stephen Ewen]

I investigated this several years ago for a hopeful med school applicant with a Ch 7 BR on their record. I was informed by a standard lender that, with 3 years of squeeky clean record, the person would get the loans. Just something to add to the mix.

 

[RockOn]

I'm worried, like others, about getting enough money for school. Meharry Medical College in TN has an M1 budget of about $42,000. 38 thou. isn't going to cover it. My expected family contribution is a big fat zero and I'm worried that if I don't have time to fulfill my work-study I am in deep doodoo. Even with that it really isn't enough to cover costs. I have stomach pains about this!

I'll come to school with no debt for a few thousand dollars of help my parents can give but that's it. I'm not sure what my credit rating is but it's surely not perfect (some late payments). It's funny that at a school where it's purpoted that most students are on financial aid there are REALLY no scholarships for entering students. Is anyone else going to Meharry with a low EFC? Do you know of any other loans or help they're going to give? I haven't received my fin. aid. package yet but everytime I ask they just say you'll be fine and there are people here to help you budget. I say that you have to have something to budget with!

Please, anyone give advice if you can. I don't want an ulcer BEFORE school starts.

 

[sl]

Hi! anyone knows the difference between bad credit and default?

 

[Winged Scapula]

Originally posted by sl:
•Hi! anyone knows the difference between bad credit and default?•

Default always means bad credit; bad credit does not always mean default.

Default usually refers to a loan which has not been paid. Lenders will vary with regard to how much time/lack of payment they allow before declaring you to be in default, but they generally will not do so for late payments or even a couple of missed payments, as long as you have contacted them.

Bad credit can obviously be the result of a loan default or not making your credit card or other account payments on time (or at all). A few late payments is not going to ruin your credit rating nor will it prevent you from getting alternative loans to pay for medical school. However, a CONSISTENT pattern of late/non payment with no explanation or attempt by you to reconcile such accounts will ruin your credit rating.

I'm sure those with a business background can better explain this than I, but hopefully this helps.

 

[abbeydesert]

The problem is, they even expect older married students to hit their parents up for money. I'm 30 years old, have been married for 5 years and fully self-supporting for over a decade- yet was still required to provide parental data in order to qualify for school-based aid. This is absurd! At my age, why should my elderly retired parents have to pay a dime for me? How many married 30-year-olds do you know who are dependent on their parents??
I just turned down an acceptance at a highly ranked private school because of this ridiculous system...the amount of extra loans I would have had to take out (to cover the parents' EFC) would have been insanely high, so I decided to attend a cheap state school instead. I'm excited regardless, but admittedly a bit irked about the financial aid situation. Thanks for letting me vent!

•
In the case of rich kid cutoff, yes this is unfortunate because at that young an age it is almost impossible to build a history capable of borrowing the needed money. But why should somebody else look after your kids (i.e. your responsibility) when you have the means to do it yourself. That is why thier is expected contributions. If this was my situations and parents actually did have the money, I don't think it would be out of line to file a law suit.•

 

[sl]

Originally posted by Kimberli Cox:
[QB]Default always means bad credit; bad credit does not always mean default.

Hi Kimberli Cox:

Thanks very much for your explanation. It certainly helps. I have already requested a credit report, so I will know soon.

Thanks again for your prompt response

SL

 

[Fermi]

Originally posted by Kimberli Cox:
•Bad credit can obviously be the result of a loan default or not making your credit card or other account payments on time (or at all). A few late payments is not going to ruin your credit rating nor will it prevent you from getting alternative loans to pay for medical school.•

I'm not even sure that simple late payments go on your credit report. I've had several months where I simply forgot to send the payment until a few days after the due date. Even though I got late charges, the late payments didn't appear on my credit report when I reviewed it. I think they usually only flag the account if your payment is so late that you miss an entire billing cycle (30 days or more).

 

[Winged Scapula]

Originally posted by drfermin:
•I'm not even sure that simple late payments go on your credit report. I've had several months where I simply forgot to send the payment until a few days after the due date. Even though I got late charges, the late payments didn't appear on my credit report when I reviewed it. I think they usually only flag the account if your payment is so late that you miss an entire billing cycle (30 days or more).•

You're right drfermin. When I said late payments I should have clarified thaht I meant > 30 days. I used to run credit checks when i worked at a real estate office and as I recall each account could note whether it was 30/60/90/>90 days past due (or obviously in default where relevant).

Thanks for clarifying that.

 

[abbeydesert]

Originally posted by Space Monkey:
•Or was this just a choice between not wanting to take out a extra loans to cover private school and saving money by going state? Please explain.•

Yes, exactly. The private school cost over $30,000 per year in tuition. Though the school does offer grants to those in need (average around $10K per student), the scholarship awards are calculated based on both the student's and parents' resources. First, they expect you to borrow up to the max (I think $25 K per year), then any need beyond that is covered by a school grant. However, you are only eligible for a grant if your expected family contribution is less than a certain amount. Since I have both parents and a husband, my EFC is higher than it should be- and on paper it looks like I should have plenty of money. So I would have had to borrow extra money to cover my parents' EFC- which would make the cumulative debt skyrocket!
The situation at my state school is different: tuition is about one-third that of the private school and I think I can make it just by borrowing enough for tuition and books (assuming my husband can cover my living expenses.) So I'm looking at a total debt of maybe $40-$50K versus $150K or (more likely) much more. It was a very tough decision, but in the end, I realized that I would be uncomfortable with that much debt, especially KNOWING that I had a cheaper alternative. Since I'm planning a career in primary care, that's a decision I'm comfortable with (though I confess I'll always be a tad wistful about what might have been...)

 

[Dreamer]

EUROdocMOM,
As far as I know the military couldn't care less about you cerdit report.
As for the cleaning of your record, you have to act fast. It is one story what they have to do and another what they do, it might take more than 30 days and more than just written communication. if you have extra money ask a lawyer.

 

[Dreamer]

Originally posted by sl:
•Hi! anyone knows the difference between bad credit and default?•

Kimberli is right in regard of difference between default and bad credit. They also do not flag you untill you are 30 and more days late. However, some lenders become "curious" even when they see one flag (happened to one person in my school). Also, there is always a chance of stolen identity what means somebody is ruining your credit record, it might hapen even if you have not lost your ID or SS card. There is also a chance of clerical mistake and so on. If you mistake, contact credit bureau ASAP but if you are short on time, contact a lawyer (you might not like us but you need us).

 

[primetime]

Alright Guys,

Here is what I have found out about getting alternative loans and what they look for on your credit report.

First you dont want to be in default on any other loans, and you dont want to have bankrupcies, liens, or things of that sort or your report.
If you have anything in collection...PAY IT!!
Three different loan officers explained to me that even if you've had something in collection for a couple of years and you go back and pay it, it shows that you are more responsible, and that you pay what you owe. It doesn't clear you completely, but it looks alot better that you do not owe anyone money, and you pay people you do owe.
As far as 30, 60, and 90 day late payments. Anything over that is unacceptalbe. I was told that they look for the 30,60,90 day delinquiencies mostly for the last 24 months. If you dont have any you are looking pretty good. As far as before that, you just dont want to have an excessive amount. Each place looks for different amounts.
In addition, they want to see that if you've had some problems, you've made an attempt to make you credit look better, i.e., you pay your bills on time now.
Lastly, if you report is not so stellar you can get a co-signer. When the loan goes into repayment some companies release the co-signer of all responsibility if you make a certain number a payments on time in the first couple of months.
Well, I think that is all of the info that I have gathered. In case anyone is wondering, my info came from Experian credit reporting agency, American Express MedEX Loans, Salliemae and Citibank citiassist loans.

 

[Hannah]

I have a situation where my rich parents aren't giving me any money for med school, so I'm screwed. i thought I would not get screwed as I did in undergrad when I didn't qualify for any loans whatsoever as I was a dependent and had to work 25 hours/week to go to a public school. Needless to say, I'm starting med school this fall and am nervous--will I get enough aid? I have pretty much zero in savings and got into a private school which = expensivo. Any help/comments welcome. I'm just getting a little nervous after reading all of these posted messages. (btw, I don't take it out on my parents here, just think at the age of 28 having to report parents income for need has GOT TO STOP).

 

[pcl]

Hannah,

I wrote a detailed letter to the financial aid office & provided tax returns that show me as not being claimed on my parents taxes since 1997. My EFC was fairly low, and I assume based on MY salary, not my parents.

You are ALWAYS considered independent for the 38500 that you can get from the federal government. If your expected budget is higher than this, you may be able to qualify for alternative loans, or your school *might* consider you independent if you show that you have not been dependent on them.

Definietly tlak it over with you aid office, some are more reasonable than others...