I am having the exact same issue. I have a federal perkins loan from 1999 that I have never paid. The original amount was $600, but now the collector is telling me it's up to $1200. They keep threatening to take legal action but the thing is so old I'm not sure how much benefit they'd find from that.
In any case, this loan does not appear anywhere on my credit bureau report but I am in the process of trying to get my score to a place where I qualify for an FHA loan. I discovered this loan because I thought about going back to school last year and applied for federal student aid and was denied because of this outstanding loan. All of my other loans are current and being paid as the result of a wage garnishment in 2009. They are now "rehabilitated" but apparently this one was lost in the shuffle some how. I am pretty sure, based on what I've read that if I don't pay this I will not get approved for the FHA loan. However, I am also concerned that paying this will cause something that isn't even on my credit bureau report to suddenly appear. Talking to this company on the phone is nearly impossible. They won't even send me a statement in the mail and just give me a song and dance. They are VERY sneaky and I just want to pay it off so I don't have to deal with them any more. In their speech on the phone they mentioned something about the fact it is negatively impacting my credit and could for up to 15 years. ???? I didn't bother to tell them that it's not on my report now.
Anyone have any experience with this? If I pay this off, will it "refresh" my credit report? I've heard that it can update the date of last activity, but that items only stay on the report for 7.5 years from the date of first delinquency. So even refreshing the last activity date won't impact my score because the account is so old, the original date is outside of the 7.5 years.
