Guidance after Default > Rehab > Default

[Anonymous]

Greetings All!

First off, just want to say that I'm grateful to have found this community and am looking forward to the journey ahead in repairing and building my credit.

Situation:

I have over 50k in student loans. After graduating they all went into default. At some point quite a few years ago I attempted rehab (don't remember if I finished or not), and then allowed the loans to go back into default. I'm in a much better place in life than I ever have been and now want to figure out what I can do to recitfy my situation and start repairing/building my credit. I've looked through this forum but have not come across anyone having a similar situation to mine so am looking for some guidance.

My main question would be what my next step(s) should be. I've yet to try to reconnect with my current lender, which is ECMC. Considering I can't attempt rehab again since you can only do it once, it seems like my only option is to either start paying through them (if possible) or to consolidate. If I consolidate, how would that look on my credit? Any guidance or input is greatly appreciated and thanks in advance!

[SCF]

You are correct that you only get one shot at rehab, so you option to get the loans out of default is consolidation.  Contact ECMC and tell them you want to get the process started and they should get you the needed paperwork.  As far as your credit, nothing will change with the old tradelines for your loans.  The collection account (if any) will show closed/paid/transferred once the consolidation goes through.  The consolidation will appear as a brand new tradeline, which may drop your AAoA initially, but will help you build credit as you pay on time.

I'm sure you can also just pay off the loan directly with the CA, but unless the balance is quite low and you'll pay it off quickly (< 6 months), I would consolidate so that you restore your access to deferment, forbearance, and income-driven payment plans.