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Getting lates removed after rehab?

Valued Member

Getting lates removed after rehab?

Anyone have any success at getting old lates removed after student loan rehab was completed? Dept of Ed/Ed financial updated everything except payment history. I've heard GW can work and if so does anyone have letters that have worked?


Message 1 of 18
17 REPLIES
New Contributor

Re: Getting lates removed after rehab?

I came to this forum for this very information. There are quite a few posts on here regarding this issue; mainly this thread.

 

From what I've been able to gather from my experience as well as reading through the threads, if you have a federal loan, and have succesfully completed your rehab program, AND your loan has been picked up by another lender, all of your lates/deliquencies/baddies on your credit WILL be cleared. My advice is to take the time to read through some of the threads here. Many people have had good luck and their baddies have been cleared in as little as 30 days, some have had to wait a few months. If it's been more than 60, I would think about disputing it and contacting the company you did your rehab program through.


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Message 2 of 18
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Valued Contributor

Re: Getting lates removed after rehab?


martinsoka17 wrote:

I came to this forum for this very information. There are quite a few posts on here regarding this issue; mainly this thread.

 

From what I've been able to gather from my experience as well as reading through the threads, if you have a federal loan, and have succesfully completed your rehab program, AND your loan has been picked up by another lender, all of your lates/deliquencies/baddies on your credit WILL be cleared. My advice is to take the time to read through some of the threads here. Many people have had good luck and their baddies have been cleared in as little as 30 days, some have had to wait a few months. If it's been more than 60, I would think about disputing it and contacting the company you did your rehab program through.


That is not true unfortunately.  Some lenders remove the old tradelines and/or clean up the lates, especially if the servicer who picks up the loan after rehab is the same one that held it previously.  In other cases though, especially often with Sallie Mae, the lender follows the law exactly and only removes the default notation from the loan status, but leaves the old lates in place until they age off your report.

 

Hope for the best, many people have great success, but be aware that you may have to deal with the lates until they age off.

Message 3 of 18
New Contributor

Re: Getting lates removed after rehab?

I posted this on another thread but I just wanted to update you on my situation (similar to yours):

 

I just recieved a letter from my agency rehabbing my Direct Student Loans. ACT (Account Control Technology) is the CA. The letter states:

 

-Any collection cost fees remaining on your account will be removed

-Any negative comments on your credit report relating to these debts will be removed

-Any block to your eligibility for deferments or forbearances will be removed

-Any certification for Federal offsets of income tax or Social Security payments will be stopped.

-Any pending or active wage garnishment action will be stopped.


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Message 4 of 18
Established Contributor

Re: Getting lates removed after rehab?


martinsoka17 wrote:

I posted this on another thread but I just wanted to update you on my situation (similar to yours):

 

I just recieved a letter from my agency rehabbing my Direct Student Loans. ACT (Account Control Technology) is the CA. The letter states:

 

-Any collection cost fees remaining on your account will be removed

-Any negative comments on your credit report relating to these debts will be removed

-Any block to your eligibility for deferments or forbearances will be removed

-Any certification for Federal offsets of income tax or Social Security payments will be stopped.

-Any pending or active wage garnishment action will be stopped.


This is a great "from the mouth" source of what to expect. I just wanted to point out that this confirms only negative comments will be removed. Never does DSL/DoE state that late payment remarks will be updated to OK/Paid or otherwise removed from the payment history.

Message 5 of 18
New Contributor

Re: Getting lates removed after rehab?


bahbahd wrote:

martinsoka17 wrote:

I posted this on another thread but I just wanted to update you on my situation (similar to yours):

 

I just recieved a letter from my agency rehabbing my Direct Student Loans. ACT (Account Control Technology) is the CA. The letter states:

 

-Any collection cost fees remaining on your account will be removed

-Any negative comments on your credit report relating to these debts will be removed

-Any block to your eligibility for deferments or forbearances will be removed

-Any certification for Federal offsets of income tax or Social Security payments will be stopped.

-Any pending or active wage garnishment action will be stopped.


This is a great "from the mouth" source of what to expect. I just wanted to point out that this confirms only negative comments will be removed. Never does DSL/DoE state that late payment remarks will be updated to OK/Paid or otherwise removed from the payment history.


Precisely. I should have put a note in my previous post mentioning that this is my specific CA who is handeling my Federal loans. I believe there are a couple good threads regarding goodwill letters to the DoE in regards to removing late remarks from your CR, if needed after rehab. I've read probably 50% of instinces where the lates were cleared up to when the TL first appeared on the CR and some who had to write GW letters to the CA in regards to getting those late payment remarks removed. YMMV.


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Message 6 of 18
Frequent Contributor

Re: Getting lates removed after rehab?

I want to add my experience with this process.  I had 3 Direct Loan Servicing that defaulted and went into rehabilitation in 2010.  After the 9 months of faithful payments (2011) I called and was told it may take a little longer because of of a (dreaded) system upgrade.  After over 12 months of payments the rehab completed and Direct Loan Servicing then had the loans back;3 new TL's were added but the old ones remained.  After calling several times (in late 2011) I was told the derogatory information would not be removed.  

 

After approximately 6 months the 3 loans were then transferred to Fed Loan Servicing (PA), and the 3 positive TL's (from the 6 months post rehab payments) were deleted and replaced with 3 new TL's.  I called the original loan servicer and was again told the original defaulted TL's would not be removed.  At this point for ease, I decided to consolidate resulting in 1 new TL, 3 TL's indicating they had been closed and the original defaulted TL's.  I called the original loan servicer and guess what answer I received?  Same as before!

 

Today I decided to take one more swing at this before I started the written dispute process and called the original loan servicer.  I explained what happened and lo and behold he said, "no problem let me look at this".  I almost fell out of my chair.  He said he just need to see if the system had flagged all 3 original loans as being rehabilitated, and if so, he would submit the request to remove.  He checked and they were, and said he would immediately add me to the queue which would be completed by end of next week.  He also said that while not necessary, if I faxed to him the credit reports with the 3 negative TL's, that would make the process go even quicker.

 

So, now I am awaiting a fax and letter from them documenting all of this, and will be a daily puller until I see the removals!

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Message 7 of 18
New Contributor

Re: Getting lates removed after rehab?


tomfromrictmame wrote:

I want to add my experience with this process.  I had 3 Direct Loan Servicing that defaulted and went into rehabilitation in 2010.  After the 9 months of faithful payments (2011) I called and was told it may take a little longer because of of a (dreaded) system upgrade.  After over 12 months of payments the rehab completed and Direct Loan Servicing then had the loans back;3 new TL's were added but the old ones remained.  After calling several times (in late 2011) I was told the derogatory information would not be removed.  

 

After approximately 6 months the 3 loans were then transferred to Fed Loan Servicing (PA), and the 3 positive TL's (from the 6 months post rehab payments) were deleted and replaced with 3 new TL's.  I called the original loan servicer and was again told the original defaulted TL's would not be removed.  At this point for ease, I decided to consolidate resulting in 1 new TL, 3 TL's indicating they had been closed and the original defaulted TL's.  I called the original loan servicer and guess what answer I received?  Same as before!

 

Today I decided to take one more swing at this before I started the written dispute process and called the original loan servicer.  I explained what happened and lo and behold he said, "no problem let me look at this".  I almost fell out of my chair.  He said he just need to see if the system had flagged all 3 original loans as being rehabilitated, and if so, he would submit the request to remove.  He checked and they were, and said he would immediately add me to the queue which would be completed by end of next week.  He also said that while not necessary, if I faxed to him the credit reports with the 3 negative TL's, that would make the process go even quicker.

 

So, now I am awaiting a fax and letter from them documenting all of this, and will be a daily puller until I see the removals!


This is my worst nightmare, I think. Perhaps because of the system upgrade, that is why you were having issues getting those default remarks removed.

 

That being said, I've also spoke with my "case manager" so to speak, and asked him about this. He said as long as my payments are on time, I shouldn't have an issue having the negative remarks removed. He even went as far to say ALL negative remarks will be removed. However, I'm not holding my breath.

 

In speaking with my PB at my CU, he did confirm to me that because he knows my particular situation, I should not have an issue getting the car loan I am seeking this spring/early summer. I orginially was going to wait until after my rehab program, but he said as long as I am showing timely payments, I should be good. Which is encouraging, because there is no guarantee I will be out of the rehab program after 9 months. My loan may not get picked up right away, as your didn't. And I don't think I'll be able to wait longer than 9 months to apply for an auto loan.


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Message 8 of 18
Frequent Contributor

Re: Getting lates removed after rehab?

Interestingly enough, the rep I spoke with today specifically mentioned Sallie Mae as a particularly difficult lender.  He offered that opinion when I simply stated the whole process was arduous.

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Message 9 of 18
Valued Contributor

Re: Getting lates removed after rehab?


tomfromrictmame wrote:

Interestingly enough, the rep I spoke with today specifically mentioned Sallie Mae as a particularly difficult lender.  He offered that opinion when I simply stated the whole process was arduous.


Sallie mae is the worst lender ever. They wont do anything to help you out no matter how bad your sitiation is. 

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Message 10 of 18