Defaulting on my consolidated student loans to get rehab
Hi! About a year ago I consolidated my student loans and they are in good standing now. But as I read more I guess I should’ve rehabbed them. I was thinking about defaulting on those loans to get into loan rehabilitation. Is it worth the effort? My current scores are TU 650 EX 620 EQ 627 I have two CC, auto loan, paid loan with Self Lender and bunch of closed CC in good standing.
Re: Defaulting on my consolidated student loans to get rehab
The benefit of rehabbing is that the default is removed from your record and sometimes people have had success with getting the lates removed. You would retain the oldest tradelines for many people. Unfortunately when you chose to rehab you were granted a brand new loan at 100% utilization. You got out quickly rather than the 9-10 payments that would be required by rehabbing. They don't really explain it or your option well. Even if you could default to rehab this time, and I'm not sure if you can or can't, you've already lost the benefit. You'll just get new delinquencies on your new loan and it will be that much longer before they fall off. Not to mention that your score will tank again due to the default. Rehabbing is great but consolidation is also a good option. I would just take it with a grain of salt and work on your profile. Your score will improve now that you consolidated, you just have to be patient. How are you on understanding the payment plans? Having consolidated, you'll probably be only able to choose an Income-driven repayment (IDR) plan. Any questions?