Delinquent Student Loan Fell Off!

[mb1986]

I defaulted on a private student loan while I was still in school back in 2009. It was a private loan by Loan to Learn (Educap) with the original amount of $22,000 and they were impossible to deal with and there was no way I could make payments at that time. Even when I graduated during the recession it took a while before I could land my first job and the extremely high interest kept accruing, eventually got sued, finally got it settled and started making payments but my past due amount was so large it took forever to get caught up which I now am and making consistant payments on. Long story short, I noticed my credit score shot through the roof and I didn't know why, everything else on my report is perfect except this loan which caused me to be denied for anything I applied for. I did research and found out that my Date of First Delinquency (DOFD) was January 2009 which is now more than 7 years ago so the entire account was removed from my credit report so now my credit report looks amazing 

Has this happened to anyone else? Is it really off of my report for good??? I just assumed it would continue to ruin my credit until time went by, but didnt realize the whole tradeline would get removed even though I have been delinquent up until a few months ago as I worked hard to get caught up.

[cem13]

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@mb1986 wrote:

I defaulted on a private student loan while I was still in school back in 2009. It was a private loan by Loan to Learn (Educap) with the original amount of $22,000 and they were impossible to deal with and there was no way I could make payments at that time. Even when I graduated during the recession it took a while before I could land my first job and the extremely high interest kept accruing, eventually got sued, finally got it settled and started making payments but my past due amount was so large it took forever to get caught up which I now am and making consistant payments on. Long story short, I noticed my credit score shot through the roof and I didn't know why, everything else on my report is perfect except this loan which caused me to be denied for anything I applied for. I did research and found out that my Date of First Delinquency (DOFD) was January 2009 which is now more than 7 years ago so the entire account was removed from my credit report so now my credit report looks amazing 

Has this happened to anyone else? Is it really off of my report for good??? I just assumed it would continue to ruin my credit until time went by, but didnt realize the whole tradeline would get removed even though I have been delinquent up until a few months ago as I worked hard to get caught up.

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Congrats.  Yes it is off your report for ever.  However you still owe the debt and they can come after you for the money owed.  I would call them and offer a settlement.  Offer them 5 or 10% of the total AND no reporting to the CRAs.  They have lost some of their leverage against you so they will want to negotiate with you.

[Anonymous]

Mine Fall off between Jan through November of 2017, next year. I wonder if I should just leave it alone or not at this point. I am afraid to call for an early exclussion when the time comes. I don't want to alert them to renew. My main concern is if I start looking for a home before they fall off that I would have to deal with them. 1 year away seems like so far. Congrats on yours falling off.

[cem13]

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@Anonymous wrote:

Mine Fall off between Jan through November of 2017, next year. I wonder if I should just leave it alone or not at this point. I am afraid to call for an early exclussion when the time comes. I don't want to alert them to renew. My main concern is if I start looking for a home before they fall off that I would have to deal with them. 1 year away seems like so far. Congrats on yours falling off.

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Keep in mind that just because the debt is not reported, it does NOT mean that you are released from the debt.  You still owe the money.

If you apply for a mortgage, this debt is REQUIRED to be included in the mortgage application.  Mortgage companies typically perform ARs and will see anything on the CRs even years later.  So if you do not include the debt in the mortgage application, that is Mortgage Fraud and is a Federal Felony.  DONT DO IT.  It is not worth it.  Eventually the SLs get charged off, sold to a CA and it will reappear on your CR.  

I have heard of Fraud cases being brought years later.  It is prima facia evidence too.  You owe a debt and you failed to declare it on a Federally Backed Mortgage application.  I would not want to face 10~15 years for this.  

The best option is to settle for 5~10% of the amount with the original lender.  Make sure you get them to agree to report Paid as Agreed.

[RobertEG]

Credit report exclusion is done by the CRA, with no involvement by the creditor or debt collector who reported the nformation.

A request for an early exclusion is sent to the CRA, who is the sole party who makes the decision.

You will not awaken the furnisher of the reported information by sending a request for early exclusion.  Even if the furnisher were aware, the date of exclusion of a prior reported derog cannot be "reset" by them.  The exclusion date is based on the type and date of the derog, as defned under the FCRA.

In the original post, it is stated that the creditor sued.

If they obtained a judgment, then that judgment can also be included in your credit report, and remain for 7 years from the date of entry of the judgment, or until expiration of the period of enforceability of the judgment.  Hopefully, it wont be picked up by the CRA, but could......

[mb1986]

Thankfully I did not obtain a judgement and we were able to just settle the debt for the amount I owed on the account but I had to make a larger monthly payments. I was adamant about not wanting a judgement on my CR. As someone mentioned above that I will require to report the debt if applying for a mortgage. If the mortgage lender sees that I m reporting a debt that they can not see on my CR, could they still find out that I had a string of missed payments and went delinquent? I'm only concerned about them knowing i am now current on the debt and no longer past due if they were able to do any kind of digging for it. But like it was stated, settling for a lessor amount and being done with it completely would be smart, that way I would not have to mention the debt at all to any lender.

[RobertEG]

Credit report exclusion does not delete information from your credit file.  It requires a CRA to exclude the adverse information from normal credit reports they issue after the exclusion date has been reached.  See FCRA 605(a).

Credit report exclusion is not absolute.  FCRA 605(b) provides total exemption of all of the normal credit report exclusion requirements in certain specific cases, one of which is when you apply for credit in the amount of $150K or more.  In those situaions, the creditor can request and receive a full file credit report that includes any derogs that are normally excluded.  While creditors rarely order such full factual reports, if the questions is whether they can still obtain access for the prior reporting of derogs that have now normally become excluded,the answer is yes.

[mb1986]

^ Thanks for the information!

[Anonymous]

That's awesome!  I would love for one of my transferred student loan accounts to be removed from my profile since they are no longer collecting on the loan.