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I recieved the letter today that my rehab is complete, and Im no longer in default. AES will continue to service my loan.
A couple of questions, I will try to keep it simple. What kind of effect will this have on my credit score? Im in the mid 550s now. Also, should I consolidate my loans to lower the payment? I plan on buying a home this year. My DH has good credit, and we were waiting on the rehab completion letter to go FHA.
@Anonymous wrote:I recieved the letter today that my rehab is complete, and Im no longer in default. AES will continue to service my loan.
A couple of questions, I will try to keep it simple. What kind of effect will this have on my credit score? Im in the mid 550s now. Also, should I consolidate my loans to lower the payment? I plan on buying a home this year. My DH has good credit, and we were waiting on the rehab completion letter to go FHA.
When the rehab is complete, the servicer will change the status of the loan from "Default" to "Repayment." Some do this in nine months, others twelve, from the date you entered rehabilitation. That is the entire purpose of rehabiliation, not to mention you can finally consolidate the loans (loans cannot be consolidated when they are in default).
Some good, solid advice...
First, check NSLDS to see if the the status of the loans has been updated. Link: http://www.nslds.ed.gov/nslds_FAP/
Second, for sure consolidate, especially if you are going to purchase a home. Not only will this improve your debt to income ratio from a lender's perspective, it will also look better on your credit report (utilization and lines of credit with balances).
With reference to how it will affect your credit, you won't see a positive change for a while, simply because your delinquency was so recent.
Update!
Transunion is the first to update my rehab. I went from 521 to 585! My credit card balances have not updated yet (to show them paid down), so I expect a jump there as well! Just wanted to let you guys know! Im monitering my other reports daily for the changes.
@Anonymous wrote:Update!
Transunion is the first to update my rehab. I went from 521 to 585! My credit card balances have not updated yet (to show them paid down), so I expect a jump there as well! Just wanted to let you guys know! Im monitering my other reports daily for the changes.
Congrats on the rehab and score increase!
My wife has two loans from AES that are in rehab. The collection accounts from the guarantor are reporting as PHEAA/HCB (I think... the amounts from what I thought were the original loans listed as Educaid don't match up...). Anyway, what happened to the tradelines that had been put on your report by the guarantor? Did those tradelines disappear entirely? Or did just some statuses change? Did any of the lates leading up to the rehab disappear?
Hopefully my wife will see a 64+ increase in her scores this summer.