Hey everyone, I'm a long-time lurker to these forums and I just thought it was about time that I actually make a post since the advice here has been super helpful during my rebuild over the last year. I'm 27 years old and have been trying to go back to school but bad credit and old defaulted student loans were making it increasingly difficult. If you don't already know, being in default on federal student loans means you can't get financial aid AND you don't get your federal tax returns.
I was paying for school out of pocket in 2017 and 2018, lost control of my finances, and ended up burning Capital One for about $350, then over-drafting my bank account at my local credit union. My car's windshield cracked thanks to a rock from a passing car and I couldn't afford to fix it, so I couldn't get a required state inspection on my vehicle. I had hardly enough money in my pocket to get gas to and from school and work. I was really, really broke. I decided it was time to put a little hold on my schooling; what good does it do me to take classes if I cant afford to get to class and I can't afford the books/materials I need to be successful anyway?
A little about my progress: I really started focusing on rebuilding about a year ago. I downloaded CreditKarma and didn't realize credit scores could even be in the 400s. At the time I felt totally overwhelmed, defeated, and embarrassed about my situation. I felt like I was alone and as if everyone else had their financial situation in order. I felt like I couldn't get ahead in school at all, despite my strong motivation, because there was just no money. I didn't know where to start and was even being denied for secured cards.
I ended up getting a much better paying job in August 2019 (honestly didn't think I would get the job, I thought I was too young and not qualified for it at all) and then taking out a Self loan in September 2019 for $545. After getting my Self loan moving, I started tackling my debts with Capital One and student loans. I have roughly $10,000 in student loans that had gone into default, I contacted the agency that had been appointed to handling my loans (F. H. Cann) and set up a rehabilitation plan. Much to my surprise, and with the help of my low income in 2018, the income-based repayment was only $5 a month (I honestly wish I would've done this sooner).
In January 2020, I decided to give it another shot at some secured cards and ended up getting approved for the Citi secured and the Self secured (SP thanks to already having a loan with them, but this card will never unsecure so I won't keep it too too long) the same day. A few months later, I completed my loan rehabilitation on my student loans (currently on forbearance because COVID, but as classes start in August they'll soon be on in-school deferment... or forbearance if they continue with another stimulus package?). Because I did rehabilitation, as part of the agreement, the status of these student loans no longer shows a history of default (this is the exact reason I did this over just consolidation and getting it over with faster than 9 months).
In June 2020 I was approved for the Discover IT secured (previously denied, approval might have been helped by my student status?), finally having a rewards card is freaking awesome!
I'm now closing in on the end of my Self loan and hoping to garden until my secured cards graduate, especially since I'm not sure how my graduation might be affected by COVID (I know some lenders are being very conservative right now, understandably). As mentioned, I'll be in school this fall thanks to finally being eligible for financial aid (such a relief)! Watching my scores finally trend upward is so encouraging!
The only weird thing is: towards the end of 2019 I think, I disputed my debt from the credit union overdraft (not really sure why, just figured what the hey?) and they, strangely, changed the status of the account to charge-off, profit and loss write off. So, it still shows up on my report but with a $0 balance. I don't know if there's anything I can do about it at this point other than wait 7 years for it to fall off. I'm honestly hoping that my good credit habits over the past year can overshadow that.
Anyway, sorry for such a long post, I wanted to write this to introduce myself a little, but also I wanted to write this to maybe help someone else that feels the way I did when I first started. I've learned that credit is a lot about delayed gratification, but it's such an achievement to watch your score go up. I still have a long way to go though!
Big congrats on all your progress. You're definitely correct about delayed gratification but it does pay off and now that you've made your first big moves and are seeing the results, it'll encourage you and keep you going. Keep your reported usage low on the cards (look up "AZEO") and never ever miss or be late on a payment for any reason, and you'll rebound before you know it 
Welcome to the forums! You'll find a wealth of knowledge and information on here, and we're all always more than happy to help!
Good job on rebuilding thus far. Just keep it up and your scores will continue to rise. If you can, maybe get another secured card to build history with. You can apply AZEO once you have three.
As for your overdrawn bank account, I think the fact that they changed it to charged off status and zero balance means they wrote it off as a loss and most likely sent it somewhere for collections. I'd keep a close eye on my reports for that if I were you.
