Debt Settlement Domino Effect - FICO Score Freefall?

[NetBaffle]

Hi Everyone.

...Once upon a time I had a credit score of 750...

This is my first post...so I apologize in advance if this turns into a long panicky rant. I'm posting today partially to vent and partially for advice. I'm young - mid 20s. I've made some pretty bad decisions and fallen into too much credit card debt. I know that now and I'm glad it was a lesson learned at a young age. It was all manageable until about this time one year ago. Some unforeseen disasters happened, among them a tornado and serious medical problems in my immediate family, all at the same time. It was terrible. I eventually fell behind in payments on 4 credit accounts. So I bit the bullet, worked extremely hard, survived sometimes off cereal and noodles and I settled my debt with one credit card (let's call it Credit Card "A") last March and paid off the amount settled for. I caught up with all the other accounts last January and payments have been on time ever since. Never been late again since last winter (other and credit card A).

...icing to the cake: my job reduced my salary due to the economy...

But it seems like ever since I settled with that one credit card company, things have continually gotten worse despite my on time payments. Last May, another credit card (Credit Card "B") closed my account because of my payment history with other accounts. Ironically, Credit Card B was an account that I kept a balance below 30% and consistently paid on time the entire time I had the account, which was about 2 years. I called them, explained my situation and asked them to keep the account open. They said no. As a result, I'm paying them as much as possible and I plan to have the remaining balance on that account paid off in about a month.

...meanwhile my credit score eventually dropped to around 630...

Today, I discovered that yet another Credit Account, Credit Account "C", is closing my account because of previous payment history, but I haven't been late with them since last December. I'm a bit upset because I had a balance of about $2000 with a limit of $5000. Will this continue to destroy my score?

I'm even more afraid now as I'm trying to secure loans for college. And if I'm denied, my education will be put on hold. It's a total nightmare.

I admit, I'm wrong. The creditors are right. I had a contractual agreement to pay them according to the terms they set for me and I couldn't do it. But I'm seriously trying here. I'm making on-time payments. I'm paying well over the minimums on every account. Yet the accounts keep closing and my score keeps dropping. How long will I be punished for mistakes I made 6 months ago? Is there anything I can do about this at all? Is anyone else going through something similar?