Time heals college credit card mistakes

Dear Dr. Don,
What is the best way to improve my credit? I'm 25 now, but I did some very stupid things in college with some credit cards and they are haunting me. I cannot buy a house or even get a loan for a car until I get this improved. What is the best way to do it?
-- George Grownup

Dear George,
You're not alone. Credit card companies extend college students credit with the idea that the students will repay the favor by staying loyal to the card after they join the workforce. They're willing to accept the collateral damage that not all of these students will be able to handle credit responsibly.

The good news is that, with time, you can rebuild your credit. With the exception of a Chapter 7 bankruptcy filing, negative information stays on your credit report only for seven years. Even during that seven-year period, you can rebuild your credit to the point where a lender will extend you credit.

If you haven't done so already, review your credit reports and credit scores to see where you stand. Bankrate's Credit Card Basics story "Credit reports and scores" provides an overview of the topic.

Repaying the old charged-off debts won't erase the poor payment history, and it's possible you no longer owe these debts. An earlier column, "Rebuild damaged credit cautiously," explains this and offers an approach to rebuilding your credit which can include a secured credit card. The myFICO publication "Understanding your FICO score" is also on your required reading list.