This is the short and tall of it:
I recently checked my credit score and as of this month my EQ/TU is 636/640. I have a defaulted federal perkins loan ($4700) that I finally tracked down last month - it went into default in 2010 (whoops!); and I'm in the process of rehabilitating. From reading the forums, I understand it will take 9 months to even be returned to the Dept or Edu for the original amount of $3000. I've moved, was completely disorganized for years, etc etc.. basically a mess. But, I'm trying to get back on track. I opened a secured credit card through my bank about 6 months ago (though it's only a low balance... $300), I keep the balance super low and make payments monthly to establish revolving credit. I believe my score has vastly improved in the last year alone, but I'm wondering if I'll be able to qualify for an auto loan while I still have the defaulted student loan on my CR.
I have very little established credit, besides this one loan that went rogue. My other student loan was for $4500 and I've paid it on time every month for the past 10 years, and there's only about $1000 left on it.
I opted for the loan rehab rathern than settling because I assumed in the long run it would look better on my report to have it come out of defaulted status rather than just paid/closed. Was I incorrect in doing so, should I have just paid it in full?
Will I even be able to get an auto loan, if I my own bank wouldn't grant me one? I applied for a 13k used auto loan with Wells Fargo, having banked with them for 10+ years, have a savings, and secured cc with them, and I didn't even qualify for even a 12% loan because of my delinquent student loan and lack of other credit. What should I do? Should I hold off on purchasing a newer vehicle til my default status is resolved?
