Well, if you don't feel you're ready, you don't have to enter the contest. There's never an obligation, even if you are a known level maker. If you really want to enter, try practicing, and look at the techniques previous contest winners have used. Perhaps ask for constructive criticism in the Editing topic. All these things can improve your level design skills. When you've got a really good level put together and are confident that people will like it, enter it in the contest.
By the way, there is no contest division for character WADs, so your character making skills aren't relevant to the OLDC. But it wouldn't hurt to practice that too, in the same manner as the levels.