Hello!
I've posted this on anohter board, but would love to hear any input you have as well!
Quickly, here is a little background. I have defaulted student loans in the amount of 13,000 (including interest). The last reporting date was March of 2001. I have not lived in the states for nearly 6 years, and they have not been able to garnish my wages, even though my social is flagged, due to international laws. I am a Norwegian resident with a Norwegian 'social security' number working for a Norwegian company.
We most likely will move back to the states in a few years and I want to have my credit cleaned up in hopes of securing a good home loan. I pulled all three reports and they are fairly dismal. EQ and TU are 588 and EX is 599.
After reading everything on here, I finally called Texas Guranteed last night and 'came out of hiding' so to speak. It was actually a lot less painful than I had anticipated! Because of what I learned, I knew that I did NOT have to pay 20% of the balance to get back on track and I think my 'handler' was a bit surprised when I quoted the law back to her regarding that!
Enough rambling! Sorry! So here is my question...She said she felt the best option for me was to consolidate thru the DOE. To make a good faith payment to get it out of default and out of TG's 'stable' and over to the DOE by December. At which point they would mark it as paid and get it off of my reports.
After alot of research, I told her I was more interested in the rehabbing option due to the positive benefits it would have on my credit scores, as my ultimate goal was to improve those scores within the next 2 or 3 years.
She said that she felt consolidation was still my better option because my student loan defaulted in 2001, so the 7 year SOL had passed and as soon as I got it out of default, it would come off of my credit completly, so I wouldn't get the benefits of a rehab anyway because the old defaulted loan wouldn't be on there anymore due to its age. There would just be a new TL from DOE showing on time payments....Apparantly because of the economy, they are offering instant consolidation instead of going thru rehab...
So, I need to know if she is correct?? What is the best option for me? Because of the age of the student loan, should I just consolidate or should I go thru the rehab process? Again, for me, the most important thing here is NOT repaying the loan, but my FICO score in 2 years. Being an upstanding citizen who repays student loans is just a benefit!
I need to make a decision in the next few days, so any advice is greatly appreciated! Thank you so much!
