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From 180 Days Past Due to Pays as Agreed to Settled in Full -SCORE ?

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Anonymous
Not applicable

From 180 Days Past Due to Pays as Agreed to Settled in Full -SCORE ?

I have 3 Navient loans in which I co-signed. They were recently 180+ days past due and at the end of Dec. I paid one payment each to keep them from defaulting. A few days later I settled in full for less than owed (50% of balance) which. Comments/Question(s) as follows:

  • Scores increased 39pts and 46pts on two of the three credit reports (haven't seen an update on the third one yet) based on the one payment to keep them from defaulting. The message on MyFico alerts stated something like: 180+ past due to pays as agreed.
  • The settle in full for less than owed hasn't been reported yet because Navient doesn't report until approx 30-45 days after receipt of payoff.
  • Question: Will I see my scores increase, decrease or stay the same when Navient updates with settled in full for less than owed? Does the amount of the debt that was last outstanding have any bearing on the scores?

Thank you!

 

 

Message 1 of 4
3 REPLIES 3
darwin_wins
Established Contributor

Re: From 180 Days Past Due to Pays as Agreed to Settled in Full -SCORE ?

Because it was paid in less than full and the update was recent, FICO dropped the score. Now that it won't change till it drops off, eventually that entry won't make much difference and over time with your other payment history your scores will go back up. It is now just a game of patience, unless you have something else on your report that may affect your score. But if those are the only baddies it won't matter as time goes by.

Message 2 of 4
Anonymous
Not applicable

Re: From 180 Days Past Due to Pays as Agreed to Settled in Full -SCORE ?

Darwin: my scores have increased because I made ONE payment on each to bring them current and that is what was reported along with the score increase. After that, about 2 weeks later. I settled in full for less than originally owed and those transactions haven't been reported yet. So, are you saying that since the last update has me current, that coupled with the settlement won't move my scores down but rather stay the same and in time be less impactful (in a derogatory way) so long as I keep everything in tact?

Message 3 of 4
RobertEG
Legendary Contributor

Re: From 180 Days Past Due to Pays as Agreed to Settled in Full -SCORE ?

If the loans were already 180 past due, then they were in default.

Your payment may have prevented an imminent charge-off, but the lates would still be reportable.

The current status would update from delinquent to pays as agreed, but that is unrelated to the payment history reporting of delinquencies..

Did they either not report the prior monthly delinquencies, or did they agree to delete them?

 

Was your settlement for more than $600 under the total amount of the debt?

If so, you should be getting a 1099c, and the cancelled debt may be treated as taxable income........

Message 4 of 4
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