It's the same sad story: muck up credit in college, become a grown-up, start wanting something I can't have (in this case, a house), and suddenly realizing that little score isn't so little any more.

This particular house has been on the market for four months now, so it's a race against time to get my scores up to 530 & hope no one snags the house w/i the next 4-6 months. (Before you ask, YES I can afford the house.) I don't have a whole lot of debt - one credit card in good standing and a couple of collections I'm handling the CB way - but I have six student loans, all in default (under 15K total; all Stafford loans). I plan to file for total and permanent disability (TPD) in the future, and economic hardship deferment (EHD) as soon as I get my loans out of default. Which brings me to...



I believe the ISR plan is nine months, so that won't work for now. Dept. of Ed. says my three month payments would be $150. I get $643 in disability/SSI, and that's *before* paying rent, utilities, etc. Would $150 count as "reasonable," or is this a case of trying to get someone to pay the most money out of pocket to meet the requirements? I looked everywhere, but I don't see anything that says that $150 is the minimum payment. If they're going to work out something reasonable, shouldn't they at least know my circumstances? Also, does a loan really have to be out of default before it can be deferred for economic hardship? I'd think that if someone is facing economic hardship, they wouldn't be able to pay the money to get the loan out of default.

The big question, of course, is credit scores. I assume that after the three month payments, the loan will no longer be in default, but what will it be? Current? Pays as agreed? Derogatory? Does having deferred a student loan hurt or help credit? Obviously it can't hurt it as much as not paying at all, but I can't see my score going from 480s to 530s just by paying three payments to the Dept. of Ed.

Another question: assuming that I'm able to do the three consecutive payments and then the EHD comes through (and it should), do deferred student loans count as negatives, positives, or neutrals on one's credit score? Are deferred loans added into the debt-to-income ratio when it comes to mortgage loans?

Finally, how much does a person's credit score go up when student loans go from default to current?

Consolidating will not change your old negative trade lines. They will be a zero balance default. You will get a new tradeline with the consolidation for the new loan.

What does a zero balance default do? Does it take scores up, down, neutral?