I posted this also on the credit forum...any advice would be helpful.

DH & I have put ourselves on a 2 year major clean up plan.

I have been reading the boards for about 3 weeks now and I am truly impressed.

We have several collections that we plan to either try and get removed or pay in full. (How do you determine which to do? I hear that it is worse if you settle the accounts rather than pay...true?

But my main concern is that I have defaulted student loans which take up a total of 8 tradelines (4 from original lender and 4 from guarantor). These loans are currently in rehabilitation, and upon final payment next March, all delinquent marks will be removed. I know that this is a good thing for my score, but how good?

We have our scores pulled this time last year and my score was 508 (FICO). I have not pulled this year. But, to go from worst (I-9 & collections) to first (never late) has to be pretty remarkable.

I also want to consolidate once this happens.

Our goal is to qualify for a home loan by January 2009.

Comments, please...

Thanks

Not all delinquent marks will be removed. The default status will only be removed. The original tradelines removed. As the old delinquent marks age though they aren't so negative in terms of affecting your score.

The tradelines from the OC will naturally fall off 7 years after your default date. The government requires that all lenders and guarantors report accuately.

Typically no they don't.

However, I and others have had some success getting negative SL TL's removed through CRA disputes.

TxQuiltGirl and/or LynnInMN,

Thanks for your help earlier. If I may, I'll piggyback on this question.

Being in garnishment now, I was told I'd be rehabbed after 9 months of over-and-above payments. After these, of course, garnishments will cease and the negatives removed (this is a federal loan).

If I pay these 9 payments early, say over a two month period, would this hasten the process? Would that end the garnishments there? I was told I could start sending in the extra today if I so wished.

Thanks for everything you do, and your advice in the past. It is all truly appreciated.

No, they have to be 12 monthly consistent payments for rehab. You can't make a year's worth of payments at once or extra payments. They have to be consistent over the period of a year. After six monthly payments, you are eligible to apply for education funds.

Thanks for the reply.

In my state, they just reduced it to 9 payments from 12. So I guess either way, I have to wait 9 months... which means they'll probably take my federal returns this year, right?

Quilty....it is changing to 9 payments. Another July 1 change.

Figures; I rehabbed mine for twelve loooooooooooooooooong months so they changed it.

Wow, I didn't see that ANYWHERE. I know interest rates are changing July 1. Does this only apply to newly initiated rehabs or those already in progress? (if you know). I'm going on my 4th payment.

I think it includes those in the process, but I am far from the expert. T? L?

http://www.nchelp.org/elibrary/DearPartner.../GEN-06-02A.pdf

Page 9....I can't get it to cut and paste!

Lynn or Quilt: am I right here?

Thanks, Lynn. It looks unclear though what happens to those already in rehab prior to July 1. If I'm reading correctly, those in rehab prior to July 1 will be at their discretion of whether to include them in that 9 month payment window.

Thanks for your response. Were these standard disputes or did you find any particular techniques that work better for this situation?

Are you talking about your 2005 refund? Did you receive a notice for offset? You can check on that by calling ...

No, not this year.

I am starting the over and above payments now (April). That means at the earliest, 9 payments from now, they would have already notified the IRS that they were taking my refund for next year, right? I learned from NAN that I could not "speed" pay them to hasten my loans into rehab.

It's possible that they won't. I never was offset, even though I didn't start my rehab until September. As early as you're starting, you shouldn't be offset.

Thanks a mil