Not eligible for Rehab...now what??

[Anonymous]

We need help!! My husband has a credit score of about 450. He has 17 accounts and 14 or these are bad.

Of those 14 about 7 of them are different student loans with HSBC and U.S. DOE. All of the student loans lare covered in red. He tried to rehab today but is not eligible because none of the loans are in default.

How can we fix this? If he consolidates will the lates go away?

Why do your loans have to be 100 years late in order for you to be able to rehab??? It really doesn't seem fair that the longer you wait to pay off the debt the better the deal you get for your credit score.

Any help would be great...also the other accounts are collections!!! We are sending out GW letters to ask to have those removed so hopefully that will work since they have been paid off.

[Anonymous]

Simply put, if its valid, accurate reporting it isn't going anywhere until it ages off. And no, there's nothing you can do about it. 

[LynnInMN]

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@Anonymous wrote:

We need help!! My husband has a credit score of about 450. He has 17 accounts and 14 or these are bad.

Of those 14 about 7 of them are different student loans with HSBC and U.S. DOE. All of the student loans lare covered in red. He tried to rehab today but is not eligible because none of the loans are in default.

Huh???  Rehab is ONLY available for loans in default....he obviously misunderstood or the collector needs his head examined!!  http://www.ed.gov/offices/OSFAP/DCS/rehabilitation.html

How can we fix this? If he consolidates will the lates go away?

Nope.  Only rehab will remove the lates.

Why do your loans have to be 100 years late in order for you to be able to rehab??? It really doesn't seem fair that the longer you wait to pay off the debt the better the deal you get for your credit score.

Any help would be great...also the other accounts are collections!!! We are sending out GW letters to ask to have those removed so hopefully that will work since they have been paid off.

Why would they remove the lates??? Your guarantor defaulted you......they have no reason to give you gw.

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[Anonymous]

Rehabbing removes lates??? I thought it only removed the collection accounts and default status.

[LynnInMN]

Actually rehab does not remove the collection account per se....the guarantors tradeline is  changed from default (180 days past due rate) to paid as agreed.

[Anonymous]

Maybe I wasn't clear in my first post....he does not qualify for the rehab program since none of the accounts are in default.

Should we wait for them to go into default? It seems that rehab is the best way to go in improving your credit score since it somehow helps to remove the late payments from your report.

Lynn I am not saying we are entitled to a GW ......Instead I am asking how we can improve his score and fix the situation. The point of this forum is to get help from others that have been in the same situation r have some insight into the student loan world. Much like many here on this forum, a mistake was made at one point and now we are trying to fix it.

[Anonymous]

The way I understand it (and I won't know for sure until May-June 09 whem my wife's loans are finished in rehab) rehab removes the COLLECTION account with the default status, and does NOT affect any other tradelines.

If you default, your credit score will plummet until you finish rehab, and you'll be back to where you are now. Just start paying whatever you can BEFORE you default. Basically, rehab puts you back to where you were before the default, and won't remove any lates.

Also, do NOT default on any private loans. Most private lenders do not have any rehab program and once you default, payment will IMMEDIATELY be due in full.

You NEVER want to default (on ANY loan) even if it'll allow you to rehab.

Lynn, the rehab agreements my wife has explicitly say the guarantor TL will be removed when rehab is completed.

Message Edited by Mike14 on 12-08-2008 09:08 PM

[Anonymous]

If he lets his loans default, his existing tradeline with the current loan holder will have a chargeoff (paid by government claim) notation, plus all delinquencies leading up to default.

He would then get an additional nagative tradeline from the guarantor, showing the loan as a collection account.

If he then rehab'd, the 2nd (guarrantor) tradeline would have all negative info removed, and the original lender tradeline (including the chargeoff and the delinquencies leading to it) would remain unchanged.

Therefore, letting the loan default and then rehabbing it would not benefit him in any way.