Did I make a mistake consolidating my defaulted student loans?

[Anonymous]

My scores are pretty terrible. I have 551 with TU and 607 with Eqx. I have 20 lines of credit. 1 auto loan that's paid off that dates back to 2006 (my first line of credit...joint account with my dad). The other 19 are all student loans. I had a couple of credit cards I opened in 2007 as well, but they have both already fallen off of my credit.

I rehabilitated one defaulted student loan and it's in good standing, but the other defaulted 18 are all with the DOE. I was that broke at the time that I couldn't afford anything other than the $5 payment for the one loan I did rehabilitate because it was somehow separate from the other 18 even though they are all federal, not private.

I consolidated because I thought it would help me go back to school sooner to finish my degree. I did this on Oct. 20 and I received an email stating that my loan would be processed around December 8th. I'm also hoping to raise my credit score as well.

All of the 19 student loans with the exception of the 1 rehabilitated, all show as closed/charged off right now. I know that the negative reporting will stay since I'm consolidating, but will the accounts all fall off from the date they were closed, last payment, or last reported? Or at all for that matter? I consolidated all including the rehabilitated one? Was that a bad idea?

If I remember reading correctly, I think I have a 10 day window to change my mind which will be on the 30th. If you were in my shoes, would you cancel and go the route of rehabilitation if it's still an option?

Any help would be appreciated. I'm very "green" in this area.

I forgot to add that I have 1 AT&T bill in collection for $114 and my loan debt comes to around $25,000.

[LindysMom]

So my fundamental question is - has the new consolidation tradeline showed up yet?  

What should happen is this:

Old Tradelines/Reporting

A-5,000 - default

B-3,000 - default

C-5,000 - default

New Tradelines/Reporting

A-$0 - paid, closed

B-$0 - paid, closed

C-$0 - paid, closed

D-$13,000 - open, current

However,  these things take time (be conservative and think maybe up to 60 days) and if you haven't gotten your new loan information yet, chances are your tradelines haven't reported and updated.  If you get anxious, you can look on the DOE website to see where things are in the paperwork process.

NOTHING will fall off for 7-10 years.  I'm not sure where you got that understanding but I would try to change that thinking pretty quickly. They may delete the payment history but they didn't when I consolidated "back in the day".  However, I was never late so I didn't have to worry.  I was just trying to secure a better interest rate, not get out of default.  

Personally, I can't answer the question of what I would do if I were in your shoes.  However, please know this is just my opinion in regards to student loans...... the answer to debt is not more debt.  If you struggled to make the payments on the $25k, adding more to that may not make sense.  However, a lot can change over time.

[Anonymous]

Hi LindysMom,

No, it hasn't shown up yet. I think I may have misunderstood something I read previously about the tradelines falling off. Thanks for clearing that up. And I'm sure you're right about the new debt. I'll keep it in mind.

Thank you for replying!