Hi guys,
So I have very old defaulted student loans from 2003-2005. They have long dropped from my credit reports. I am wondering what the best route is to come off the Caivrs list. I know the two choices for me are consolidate vs rehab. To break it down, if I consolidate, does that action alone start the removal process from Caivrs? I understand it isn't an instant removal and it can take time for them to update, but if I enter into a consolidation plan, does that afford clearance off caivrs relatively in a few months? If I chose to rehab, I understand 9 payments have to be made on time and then the clearance would start again with time to update.
In typing this, in short, if I want the fast route, consolidation seems best (if in fact I can be cleared from caivrs with consolidation proof).
What about the defaulted original loans that fell off my reports years ago? They can't by law return onto my credit reports, correct? As far as the new tradeline if I consolidate, of course it would then start reporting on my CR but would it be a new tradeline? As a new tradeline, would my score drop due to a new account being opened? If these questions seem basic or silly I apoligize, it is all overwhelming and I just want the correct information which I know will be in this forum. Any other advice on this that y'all can advise I will happily take it all in! Thank you for your knowledge and willingness to pay it forward for others to learn from!
Starting Score: 461
@dragontears thank you very much for your response. I am very close to choosing to consolidate my defaulted loans. I ran the simulator and with the total in default of $23K, the estimated roughly monthly payment for an income driven plan is $79 for the first 12 months. Please let me know if I am incorrect, but once consolidated, then the default is removed which means once update, my name would clear from Caivrs. I know that rehab probably would be better long term, but I don't want to wait 9 months, probably 10ish to clear Caivrs. Plus I am thinking that once I start the new loan, I will have that first year to possibly pay the balance off. I just want to make sure that if I consolidate, once it goes into effect that this starts the process of getting of Caivrs. That then means that I can either utilize FHA or a conventional loan instead of being pigeon holed into only the conventional due to me being on Caivrs. Honestly, it will also be good to get those dang defaulted loans finally taken care of and paid. They are my responsibility and even though they fell off my CR many years ago, I still owe it and it is still my responsibility to make right. I don't mean to put you on the spot but can you give any more advice? I appreciate your advise so much. Ty again!