Quick Question about Loan Rehabilitation!

[Anonymous]

Hey guys, I'm getting ready to set up Loan Rehabilitation with Delta Managemetn Associates, though it is owned by USA Funds. With the program, I'll be paying for 9 months to get my loan in good standing and they'll remove the default once completed.

My question is, during the 9 months that I am paying, will USA Funds continue to dock my credit as faliure to pay the original loan or will they report as paying on time since I am in a loan rehabilitation program? The guy over at Delta Management was unable to answer this question even though I asked multiple times, simply stating that they had nothing to do with credit (which is a lie, but whatever)

[Anonymous]

More likely than not, you will still get it reported that the payment isn't being made/late. It is said that once the loan is rehabbed, the default AND negative reporting after default will be removed.

Hope this helps and good luck with your rehab!!

[LindysMom]

Do NOT count on lates being removed.  It has happened for some, but not for others.  There seems to be no rhyme or reason as to why some had their lates removed and others have not.  Do yourself a favor and don't expect the lates to be removed, but hope that they do.  The program is still VERY BENEFICIAL. 

I just finished my rehab and the loans are in the process of getting transferred to the new servicer--I'm less than 30 days out of that new payment so nothing has updated yet on my credit report.  MNy loans have been assigned to the new servicer, however, they don't even have the loan info yet.

The nine months of payment WILL be reported on your credit report, however, during the 9 months of rehab they will still be listed as in default.  Which is very accurate.  The positive is that you have 9 new months of on-time payments, the "downside" is that you have to "wait" 9 months to get the tradelines updated to no longer being in default.  My credit score did not increase at all during those 9 months, mainly because the status stayed the same, if that makes sense.  Once everything is updated, I expect a significant boost to my credit score.

The program goes pretty quickly, so don't get discouraged, it seems these last few weeks are the slowest, getting everything updated

[Anonymous]

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@LindysMom wrote:

Do NOT count on lates being removed.  It has happened for some, but not for others.  There seems to be no rhyme or reason as to why some had their lates removed and others have not.  Do yourself a favor and don't expect the lates to be removed, but hope that they do.  The program is still VERY BENEFICIAL. 

I just finished my rehab and the loans are in the process of getting transferred to the new servicer--I'm less than 30 days out of that new payment so nothing has updated yet on my credit report.  MNy loans have been assigned to the new servicer, however, they don't even have the loan info yet.

The nine months of payment WILL be reported on your credit report, however, during the 9 months of rehab they will still be listed as in default.  Which is very accurate.  The positive is that you have 9 new months of on-time payments, the "downside" is that you have to "wait" 9 months to get the tradelines updated to no longer being in default.  My credit score did not increase at all during those 9 months, mainly because the status stayed the same, if that makes sense.  Once everything is updated, I expect a significant boost to my credit score.

The program goes pretty quickly, so don't get discouraged, it seems these last few weeks are the slowest, getting everything updated

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Thanks!!

[wife2froggy]

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@LindysMom wrote:

The nine months of payment WILL be reported on your credit report, however, during the 9 months of rehab they will still be listed as in default.  Which is very accurate.  The positive is that you have 9 new months of on-time payments, the "downside" is that you have to "wait" 9 months to get the tradelines updated to no longer being in default.  My credit score did not increase at all during those 9 months, mainly because the status stayed the same, if that makes sense.  Once everything is updated, I expect a significant boost to my credit score.

The program goes pretty quickly, so don't get discouraged, it seems these last few weeks are the slowest, getting everything updated

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I read this a lot - for me,. that's not how it happened. No payments were ever reported during the rehab. Once the rehab was complete, all collections from DOE were deleted. My loans returned from FedLoan back to FedLoan and I've made a couple of post-rehab payments, still with no credit update. They're still showing them as closed accounts with a zero balance. The rep said it was because the switch happened after they reported. 

Now, however, I've gone into consolidation. What I'm trying to figure out is after all the collections dropped I got a big (50 point) increase across the board due to all personal finances dropping. I was hoping that the closed accounts would have reopened and shown current since the default status (that's how it went for my husband. His increase was 150+ points!)

My question is, will I see another huge DROP due to my personal finances going way back up again or will it help due to being open and current credit?

[LindysMom]

I'm really surprised to hear no payments were reported.  Did you pull your actual score during the rehab time & look?  Mine are being reported and they should have been reported.

I'm honestly not sure what a consolidation will do.  My loans were already consolidated once I left grad school to try to secure a better interest rate.

Would you mind sharing what your husbands tradelines looked like when he got that huge increase?  That seems like a lot more than what others have experienced?  GOod for him

[wife2froggy]

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@LindysMom wrote:

I'm really surprised to hear no payments were reported.  Did you pull your actual score during the rehab time & look?  Mine are being reported and they should have been reported.

I'm honestly not sure what a consolidation will do.  My loans were already consolidated once I left grad school to try to secure a better interest rate.

Would you mind sharing what your husbands tradelines looked like when he got that huge increase?  That seems like a lot more than what others have experienced?  GOod for him

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I'm very very positive they weren't reporting, lol. I've become credit score obsessed for the last year while we prepare to buy a home.

My husband, when his DOE collections fell off, had 8 DOE collections, 1 small medical collection, 1 Sprint collection, a perfect history car payment and a couple of AU accounts on his profile. Basically when those 8 fell off it was nearly every open account that was bad... PLUS, when his loans transferred they immediately backdated his loans to the default date and marked them as current (he's with Navient.) His old lates from Nelnet did not fall off but they were closed with lates.

[LindysMom]

Have you filed disputes?  That would be my next route.