Student Loan Help

[Bell536]

My  student loans are reported in six separate trade lines and also reported a second time (6 + 6=12 separate TLs) due to OC sending to CA.  

OC shows late payments from 2006-2007 and says they cannot remove them.

We are working on our credit for applying for a mortgage in the next 30 - 60 days.

OC said they cannot pull back loans.  

The loans are considered dafaulted.

CA has been paid on time for past three years and cannot do rehab.  

She said our two options are to either pay in full (which would result in 6 paid in full collecton accounts)

or to consolidate (which would result in a new starting date?)   if we consolidate would the CA delete the collection accounts from my CR?

If we paid the CA the settlement, would that look bad prior to buying a home showing such a large pay off on a student loan collection?

What would you do?

Sorry for all the questions..

Thank you in advance for any advice

[InvincibleSummer3]

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@Bell536 wrote:

She said our two options are to either pay in full (which would result in 6 paid in full collecton accounts)

or to consolidate (which would result in a new starting date?)   if we consolidate would the CA delete the collection accounts from my CR?

If we paid the CA the settlement, would that look bad prior to buying a home showing such a large pay off on a student loan collection?

What would you do?

Sorry for all the questions..

Thank you in advance for any advice

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I have no advice that's going to help your score in the next 30-60 days, unfortunately.  Consolidating will start a new tradeline but the old tradelines don't go anywhere. The negative information will remain. Paying the CA shouldn't drop your score either, but it certainly won't raise it. It'll look better on a manual review, but hard to say if that will help in terms of whether or not you'd be approved for a mortgage.
 

Is your score high enough now to qualify for the mortgage? If so, then I would pay the CA. If not - I honestly don't know of a way to raise your scores in the time frame you've outlined here.

[Bell536]

I've been working hard the past two weeks to clean up the report.  I already have 4 successes this week getting late payments and collections off of there.  Just waiting for the bureaus to update and score to increase.  I am determined to make this work.  

If we have to pay the collection account for the school loans, we will.  I won't expect it to do anything to the score - just make it look better to the loan officers that the collection is paid.  

Thanks

[Bell536]

so consolidating will do nothing positive for us other than buying us time to pay it off.  it won't do anything for the score or make my credit report look any better?

[kjel]

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@Bell536 wrote:

so consolidating will do nothing positive for us other than buying us time to pay it off.  it won't do anything for the score or make my credit report look any better?

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Not likely in the very short term.  Once a collection hits your CR and score that's pretty much it, paid or unpaid does not change the score. Only time does.

If you are trying to obtain an FHA loan you will also have to clear CAIVRS which is a databse that logs all federal debt. If you are in default for one federal debt, you won't be able obtain another type of credit that is originated or guaranteed by the feds. There is another thread in the Student Loan forum that discusses that in more detail and how to get cleared from it more quickly.

[SCF]

Why are you unable to rehab the loans?  Are they private loans, or did you already rehab them once in the past?

For federal loans, rehabilitation is the best option to remove the default status because it removes some (in some cases, all) of the negative information.  With consolidation, you'll be able to clear CAIVRS relatively quickly, and it will create a new tradeline on your report, but the collections tradelines remain on your report, though they will report paid and closed.

With only 30-60 days to work with, if you need to clear CAIVRs, your only option is consolidation.  If you have 9-12 months, you can reap much greater overall benefits.

[Bell536]

The person I spoke to (at the CA) said we couldnt  I have no idea why....we have been paying on time for 3 years already.

Never rehabbed them they defaulted with OC and was sent to CA.  As soon as I got the CA notice I started paying on time back in 2010.

The OC loans were with JP Morgan / ED South - Federal - which the rep there said they dont "buy or fund" loans anymore and pretty much said we

needed to work out what to do with the CA.

I don't think we need to do FHA as we can put down 40% on the house.

I have about 90% of the derogatory items on the report clearing/coming off/ being adjusted after 2 intense weeks of calls, faxes, mailings etc. so hopefully the credit score will be coming up once those start to fall off.  The final thing left is this darn CA school loans that are paid on time as a "collection" and CO school loans with old late payments.