Sub 600 Credit Score and Getting a TS Clearance

Long time lurker, first-time poster here.
I am in the process of applying for a TS clearance, I recicved a COE offer and the SF-86 was the next step. I submitted my SF-86 last week. Overall I have a very solid work history and skill set. Also my references even 4 or 5 deep should turn up good. My only concern is with my credit my current score is 555 but has been going up little by little each month.
I got past a rough patch in which I had a bunch of late payments and some credit cards charged off. I have been on time with my payments for the still active cards for over 6 months now and been paying all my other bills on time.

There is a part on the SF-86 where they ask what have you done to fix these issues. I listed the following all which I have been doing

  1. Setting all my credit cards to auto-pay so they can never be late.
  2. Not applying for new credit until I fix what I have.
  3. Paying down the balances on my active cards to lower my debt to income ratio
  4. Paying any bills that come in (small medical bills things like that) and keeping documentation they were paid (copies of the bills and checks, screenshots of payments posted, etc).
  5. Working with a credit repair company to fix any issues such as possible inaccuracies that could be keeping the score low.
  6. Working with the accounts in collection to set up a payment plan to pay them off.

The total debt I have is under 20k (this includes an on-time auto loan, student loan and all active credit cards and all collection items).
There are no judgments.

In summary, I got a hole with a bunch of credit cards some went to collections now I am rebuilding my credit and in the process of slowly paying them off the items in collections.

Good thing that if I get the job I can use part of my 403b to nuke all my debt including car loan and be 100% debt free (which I also stated in the SF-86). How would you look at that and my chances of getting the clearnace aprroved. This is BIG for me and I have actually started 2 part-time jobs have extra income to help with the process.

If you have any suggestions on a better route to go that would mean a lot to me. Trying to improve my chances the best I can to get this position and also fix my credit and never be in that spot again.

How far under 600 are you? To be frank I would likely not submit you until I saw you rise above a 630 minimum. I usually shoot for 650 minimum. You speak to a difference between collections and judgments. Honestly it isn’t that big a difference there. One just means they moved legally against you. We all understand no income, means no outcome…but getting into a payment plan on ALL debt, not most debt, ALL debt is the only way to move forward. Leaving even 2 or 3 unaddressed hurts your chances. See if you can work out a minimum payment plan and then stick to it so all debts are at least in a repay status with a few payments under your belt. Otherwise I think you have a high chance of rejection. The overall standard is the same for both S and TS. But the criticality of TS means they may give more weight to debts left unpaid.

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I will get on that RIGHT now. Calling all the collections asking for a min payment and then sticking to it.
I am at 555 right now.
So I just spent the past hour calling the 6 items listed in collections on my report. I agreed to payment plans for all of them. They are sending out letters to me as confirmation of those agreements. So that I hope is a step in the right direction. I can login and make payments online and view account/payment history online.
Any other suggestions?
Now there are a few charge offs that do have not been sent to collections. I assume call the original creditor and see if they still own the debt and work it out with them or if they do not own it they will direct me to whoever does?
Just want to try to #1) Make sure I am paying back old debt that is mine which I should be doing #2) Fix my credit and #3) Try to be looked at as favorable as possible in this process so I am approved for this Clearance.
The way I see it. Even if I do not get the clearance this needs to be done one way or the other.
If you have any other suggestion or if this looks good to you please let me know.

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I would just input the fact that you got ahead of it BEFORE the job offer will show you didn’t just “do it to get a clearance” I’ve been looking at the appeal briefings and they dinged a lot of people on it because people try to get things straight right when they HAVE to do it, so a show of you working towards it and solidifying it like @amberbunny said will help you even in case of rejection.

Thanks guys for the feedback. Yes I got my active card payments on track before the offer. Got the 2nd job to have more income coming before the offer also which would let me pay more back bills.
Looking into Debt Consolidation/debt resolution program right now as I type this. It might make everything more manageable and pay back everyone in one lump payment than all this individual payments.
That way I can pay everyone back I owe at once.

Honestly, you can do everything those companies claim by yourself with no fees. Even a decent credit union offers some of that counseling free to members. I lost 2 employees that fell for a scam company. They were sending all the bill money to them…company wasn’t paying anyone. Employee lost clearance. I was surprised when I dug into the appeals site and saw how hard they dinged folks for trying to work on credit because they were up for a clearance. So that is a good point brought out. Other than being money savvy, realizing car insurance and health insurance rates also base your charges on credit history, there really isn’t much penalty or incentive for folks to focus on fixing credit. Other than simply wanting to do the right thing…in the non cleared world…nobody cares. And there are always subprime places willing to lend money at crazy interest rates. You most certainly pay a penalty there.

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100% Correct. Called one company and once they spit out the numbers including their fee I declined. I didn’t get warm fuzzy while on the telephone with them and reading this makes me know I did the right thing. Going to handle it all myself.
I am hoping this is enough and I can raise my score AT least above 600 by say Sept. Either way I started paying back all the people I can based off my current income. Going to see if I can continue to negotiate affordable payments so I can pay everyone at once . Or if not knock off the lowest balance ones first.
I know amber said I shouldn’t nuke my debt with my 403b and/or pension but the say I see it I am starting new 401k and pension if I get on board. I rather knock this out and literally have zero debt. I will feel much better going into a new career, new location starting new with zero over my head.

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