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Rehabilitation, Consolidation or PIF Best for Credit Score?

Started by RepaymentMan, July 07, 2019, 07:07:11 pm

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RepaymentMan

Hello all, I am new to this board and hope you all can give me sound advice in my Student Loan repayment journey.

I have a scenario where I have very old defaulted Federal loans totaling about $20,000, that both defaulted and fell completely off of my credit report many years ago. A collections agency is handling the loans now, and have recently began to re-garnish my wages. I want to get this situation taken care of, but fear making payments via either rehabilitation, consolidation, or payment in full, will cause the negative trade lines to reappear on my credit report and cause my scores to plummet. Is this true? Will new payment activity trigger the loans (and associated negative trade lines) to reappear on my credit report for a new 7 year period?

What's my best course of action, with this scenario, to have the least impact on my scores? I can't afford to pay all the loans off in full, but I could manage to pay off a few of the smaller ones. Is any option better than the other in terms of maintaining a good credit score? Your assistance is greatly appreciated. I thank you in advance for your help.

TheCollegeInvestor

Rehabilitation removes the default and is our recommended approach to handling default. However, it's a "one time thing", so don't mess it up after, or you're not going to have the option again.

Read this: https://thecollegeinvestor.com/22174/student-loan-default/

RepaymentMan

Thanks for the help.

3 questions I still have are what happens in regards to my credit report / score (which all loans have aged off of long ago) should I actually pay the loans in full?

Also, I have multiple loans all being handled by a Collection Agency. Is the Collection the ones I need to contact should I want to rehabilitate them, or is it someone else?

And do I need to rehabilitate each small loan separately?


TheCollegeInvestor

1. If you repay the loans in full, we recommend asking for a default removal for payment. Otherwise, it's best to rehab and then pay them off (to get any default off your credit report).

2. Contact the agency

3. Yes, but they'll do it all together.

Garrygb

If you're determined to "game" the system, here's your chance. Your credit score changes every time the credit bureaus update your credit file with new information, which is reported by your lenders every month. My friends advice me contact to https://www.boostcredit101.com/