02-16-2013 07:45 AM - edited 02-16-2013 07:49 AM
I am teetering on the edge of having all my financial issues from my early 20's removed within the next year... but the student loan, I believe.
I took out the loan in early 2006, was only for $1000. That next year, I ran into some personal issues (disabled son, moved, custody battle, etc) and had to leave school. I never paid on the loan and was never contacted about the loan. It was a pretty difficult time and I didn't leave a forwarding address and was a 1099 employee. Eventually it ended up defaulted on my credit report and was then transferred to a collection agency. It was paid in full in 2010.
Now, it is listed on my credit report with an open date from 2008. Is there anything I can do to have it removed sooner since the account was actually open in 2006 and a payment was never made on it?
If I can figure out how to have this removed, I will be left waiting less than a year for (all including this student loan account) 3 paid derogs from EQ, 2 paid and 2 unpaid (medical) derogs from EX, and 3 paid and 1 unpaid (medical) derog from TU to fall off. After which, I have 10 open credit accounts, 1 closed credit account (from 2004, will fall off soon), and a home mortgage (6 months old) all with perfect payment history.
I'm sure it won't really make a difference to my score, but just that feeling of having a clean report would be nice. It's been a long road, and I've done it as a single mom with 3 kids.
02-16-2013 10:23 AM
If you have documentation that the loan is reporting incorrectly, then the first thing I would do would be contact the lender that is reporting. Explain the situation and offer to send them the documentation. If that doesn't work, you can dispute with the CRAs.
BUT, changing the open date to 2006 will not remove the lates from your report any sooner. Negative information is not removed based on when the account was opened, it is 7 years after the negative itself occured. So, as each late on that account reaches 7 years old, they will slowly fall off, and once the account has been closed for 7 years (since it has a negative status), it will fall off entirely. If it was paid in full in 2010, it should fall of in 2017.
Your only other option for removing the information sooner is to write goodwill letters to the lender/collection agency reporting the negative information. Some people have had success, but it often takes multiple attempts and some luck. As you said though, a loan this old is not impacting your score as much as it did years ago, and the impact will lessen as time goes on. It may be a better idea to wait it out and focus your energy on building good accounts on your report.
02-17-2013 10:16 PM
Thanks for that explanation SCF as I has a similar question. I was afraid that paying my loans off would result in the lates being frozen in time until the whole account fell off. Do you think it would be advantageous to not pay off my loans until the lates fall off so that the TL will now be positive and report for 10 years after closing? I'm not likely to do that, just wondering what you may think. I have 4 SL accts reporting 30-120/180 lates from May-Nov 2010.
02-17-2013 10:19 PM - edited 02-17-2013 10:22 PM
Thanks for that explanation SCF as I had a similar question. I was afraid that paying my loans off would result in the lates being frozen in time until the whole account fell off. Do you think it would be advantageous to not pay off my loans until the lates fall off so that the TL will now be positive and report for 10 years after closing? I'm not likely to do that, just wondering what you may think. I have 4 SL accts reporting 30-120/180 lates from May-Nov 2010.
Sorry for the dup. Computer acting wonky.
02-17-2013 10:46 PM
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