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consolidation done, now what????

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golfingmama
New Contributor

consolidation done, now what????

I just receieved notice that my defaulted SL were successfuly consolidated into the IBR plan (at 2.5%interest-yay) and i have a monthly payment of $0.  what happens next?  will a new account be on my CR?  will my CS increase (bc on my TU score simulator my "past due balance" will be 0)?  TU simulation says i should see a jump of 30-50 points.  can this be true?  (EX doesnt report my old SL as "past due" so should i expect any change?)  *additional info*-the old SL is listed as a "collection" account.

 

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Tazman81
Established Contributor

Re: consolidation done, now what????

Hi golf...   Was there a reason that you choose consolidation rather than rehabilitation of your student loans?  IMO, I don't forsee a change in your credit score as a consolidation does not get rid of the previous negatives on your credit report.  It will allow you to start building current good payment history, but the negatives that are there will continue to keep your score down until they have had time to age.

 

Just based on your post, did you not do the rehabilitation program as you would not have been able to make the standard payments?  I just favor a rehabilitation program over consolidation because with rehabilitation, they will delete the baddies from your credit report.


Current Score: Eq: 823 Tu: 830
Goal Score: Eq: 850 Tu: 850

Wallet: PenFed Power Cash 50k | AMEX Blue Cash (AU) 49.5k | Cap One QSMC 26.5k | AMEX Platinum NPSL | USAA Signature Visa 25k
Message 2 of 4
golfingmama
New Contributor

Re: consolidation done, now what????

after careful consideration i consolidated based on the long term goals i have for myself . rehabbing meant an immediate payment and i am not in a current position to commit to it. With consolidation, my AGI was factored and I owe nothing (until i get a better job or win the lotto, lol) for at least the next 2 years (even if i get a raise, i still qualify for the $0.00 bc of family size). my baddies are already over 2 years old and have an "OK" rating since end of 2008.  my score isnt too bad, i'd just like a boost into the 700 club

Message 3 of 4
Tazman81
Established Contributor

Re: consolidation done, now what????

Very good.  I am glad that you looked at both options and chose what was best for you.  Very smart.  Only advice I would have is if you are able to make some type of payments (even though IBR says you don't need to), then that will likely help decrease your balance and have you pay less in the long run.  Of course I know everyone's situation is different, but just wanted to offer that suggestion.

 

Though I don't think you will see that major jump in your score that the simulator was talking about, I do think that as your baddies continue to age, your score will increase.  It won't be a jump, but likely just a smooth road upward.  Smiley Happy


Current Score: Eq: 823 Tu: 830
Goal Score: Eq: 850 Tu: 850

Wallet: PenFed Power Cash 50k | AMEX Blue Cash (AU) 49.5k | Cap One QSMC 26.5k | AMEX Platinum NPSL | USAA Signature Visa 25k
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