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How long does it take to reestablish?

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Posted by Sarah ( on November 03, 2002 at 02:27:14:

My husband and I have had bad credit since we became married back in 1996. We started the marriage by going in debt for our wedding and it just all went downhill from there. A lot of very stupid financial decisions and poor budget making caused us to be in the situation we're in now.
We've had enough. It has finally dawned on me that with our credit record, we cannot afford credit at this time! We're about $20,000 in debt- most of it my student loans ($10K), left over balance from a repo'd car ($7K), and little odds and ends- some old medical bills, old utilties, charged off credit cards, etc that add up to about $3K.
I've been paying the old finance co. for the repo'd car $410 a month-that should be gone in 16 months, less if I can beef up the payments. I'm trying to avoid a judgement and garnishment.
I've been paying about $200 a month on my student loans-been thinking of consolidating them. They all went into default about 6 months ago but if I can keep up the payments for 9 more months they'll go back into "good standing".
The little odds and ends are not being focused on right now. To be honest, some of them are quite old and almost at the 7 year mark where they'll fall off my credit report so I'm ignoring them for the time being.
We live pretty modestly right now. After the car was repo'd, I went out and bought a used minivan for $800 cash. As ugly as it is, I love it because I'm not stealing from the rent money or writing a boucing check to make a payment on it! We have one credit card- with a balance of $178. I haven't used it in months...
My question is, how long do you think it would take to gain an "A" rating-credit wise? I figure 4 years. 2 years to to payoff my student loans and anything else I can't dispute away, 2 years to reestablish credit somewhere. We'd like to one day buy a nice home, putting about 5% down and qualifying for the advertised rates. Am I dreaming? Is this even possible? How exactly do you go about doing it? I just don't want another 29% interest auto loan or credit card where you have to pay a $200 fee for a $200 credit limit! Would it be better to just work on paying down old debts for 2 years and then not getting any add'l credit or am I going to have to bite the bullet and pay insane interest again to prove that we're not credit risks anymore? Would just paying our debts and our 1 credit card increase our credit scores that much?

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