Reporting Consolidation to Credit Agencies

[Mauveboy]

I'm in the process of consolidating some defaulted loans and was wondering about the time it will take for my lenders/guaranty agency to report. My loans date of first default is  9/28/2006 and are very close to their 7 year drop off date. I'm in the 15 day waiting period of consolidation before the funds are dispersed. Once the defaults are paid through the consolidation, my plan is to write a letter of goodwill to my lender/guaranty agency asking them to remove the negative defaults 3 months early and only report the loan as paid in full as of the date they received the direct loan. At the same time I will also open disputes on the tradelines across all 3 credit agencies. My theory is that this will at the very least update my tradelines faster than just sitting and waiting and even if the defaults aren't removed they will be able to determine that the tradeline has changed quite easily by contacting the DOE and/or my Guaranty agency (ECMC). I also see a few minor errors on my report and figured this would be the time to correct them all. Does anyone have any experience doing this or know of any reason why I'd be wasting my time trying? Seems to me this would would force my lenders to report earlier than they might otherwise and the letter of goodwill would hopefully make them report favorably.

[InvincibleSummer3]

Disputing doesn't necessarily mean that the process will be faster. Entirely possible for the dispute to hit while everything's still processing.....what are you going to do if it comes back verified? I think you underestimate the bureaucracy.

Is there a reason this needs to be expedited? Why the rush?

[Mauveboy]

I need to buy a new car and would like to buy a house this Summer, so the sooner my reports are correct, the better. There are already errors that are easily corrected (employment history etc..) that I would like fixed before I attempt to obtain a mortgage anyway. If I can see that the defaults have been paid on my ECMC account today for example but they don't report until the first week of May wouldn't disputing the tradeline just prove that it has been paid and in a way make ECMC report that before May 1st? At that point it shouldn't hit while everything is processing because the process will be done with the exception of ECMC reporting to the credit bureaus. I would even be able to provide proof that they are paid if need be through the letter I should receive from ECMC verifying that. I'm not as concerned about removing the default status early as those should drop off in September anyway. My FICO score is good enough for an FHA loan, but having active delinquent payments pretty much closes the door to getting anytype of meaningful credit so the sooner I can show those accounts as paid, the better. I've just seen instances of people waiting only to have things reported incorrectly and have to dispute anyway so being pro active is the best bet. My theory is that it can't hurt as much as having 3 unresolved defaults!

[InvincibleSummer3]

Here's the thing - when you dispute this with the CRA's, you can't assume that there will be a real live person picking up the phone and calling another real live person. Not so. All they have to do is check E-OSCAR, the automated system. They're not even obligated to contact ECMC directly.  Even if you have documentation, they don't know you from Adam so most likely it isn't going to be looked at anyway.

You can do what you like, but just be prepared that this may not help you at all.

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/E-OSCAR/td-p/382221

[Mauveboy]

  Thanks! That was the answer that I needed to know. Just didn't want to waste my time if there was a process behind the process. I had no idea about E-OSCAR. Should I at least write a letter of goodwill to get the defaults removed and dispute the errors I know are wrong now?

[InvincibleSummer3]

A goodwill letter certainly can't hurt. I don't think correcting employment info, etc. can hurt either but it's not territory I'm knowledgable about. Good luck!

[ecalmese]

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@InvincibleSummer3 wrote:
Disputing doesn't necessarily mean that the process will be faster. Entirely possible for the dispute to hit while everything's still processing.....what are you going to do if it comes back verified? I think you underestimate the bureaucracy.

Is there a reason this needs to be expedited? Why the rush?

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will a consolidation at least help the credit score when someone like myself is in this situation?

[InvincibleSummer3]

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@ecalmese wrote:

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@InvincibleSummer3 wrote:
Disputing doesn't necessarily mean that the process will be faster. Entirely possible for the dispute to hit while everything's still processing.....what are you going to do if it comes back verified? I think you underestimate the bureaucracy.

Is there a reason this needs to be expedited? Why the rush?

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will a consolidation at least help the credit score when someone like myself is in this situation?

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Not really, unfortunately. A consolidation doesn't remove the default notation, so the borrower has to wait out the reporting period.

[Mauveboy]

It bumped me up 10 points. I expect another jump when the default finally comes off in September.

[Mauveboy]

Went up another 3 points. One of the loans I consolidated finally reported it's zero balance