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Ready to be out of default!

Regular Contributor

Ready to be out of default!

The countdown is on!  Next Friday I will make my last payment on my defaulted student loans!  I'm making it early so that it can all be over with as soon as possible.  I'm really hoping that between removing the default (and hopefully all of the late payments because they are with the DOE and that seems to be the pattern) and having a civil judgement removed from my reports I will be ready to move forward with my house hunting journey/mortgage approval process!  I rehabbed my loans with Action Financial, and they have actually been really great to work with throughout the process.  I had been bad with my student loans and not made my payments but was ready to finally start being a responsible adult, so I called my then-servicer (Great Lakes) to get started on some income based payments.  Only hiccup was I had resigned from my teaching job and was getting paid through the summer with nothing lined up yet, so how does one fill in the income information!  Long story short, got a job and sent in the paperwork with my new income information and in the meantime, my loans went into default.  I actually contacted the collection agency before they contacted me (that might be a first!), so my loans were literally in default for a matter of days before I started making payments on them.  Hoping my new loan services is good to work with, as I have heard some bad things about some of them!  I'll let everyone know how my journey goes and how my scores are impacted.

FICO8 Scores as of 8/8/17: EQ-643 TU-644 EX-629
Current FICO8 Scores as of 11/7/17: EQ-675 TU-658 EX-652
Current Mortgage Scores: EQ-686 TU-677 EX-641
Message 1 of 6
5 REPLIES
Established Contributor

Re: Ready to be out of default!

Congrats on getting those student loans under control.  They do tend to sneak up on us, and many time since they are in deferment while in school, they fall under the category of out of sight out of mind.

 

Just for some clarity.  Did you get your loans out of default by catching up on the overdue payments, or did you go through the DOE loan rehabilitation program?


Starting Score: Eq: 662 Tu: 532 (03/02/2011) CH7BK 01/12/2009 Discharge
Current Score: Eq: 712 (02/03/2017) Tu: 717 (04/03/2013)
Goal Score: Eq: 760 Tu: 760

Wallet: PenFed Power Cash 25k | AMEX Blue Cash (AU) 49.5k | Cap One QSMC 26.5k | AMEX Platinum NPSL | LFCU Visa 10k
Message 2 of 6
Regular Contributor

Re: Ready to be out of default!

Thank you!  I won't say that they snuck up on me, it was just that I wasn't making enough money to make my payments and no one ever offered up the income based repayment plans until right before I went into default. I was working two jobs and still wasn't living comfortably, yet didn't feel like I was living beyond my means!

 

I did the DOE loan rehabilitation program.  Eager to see what my new payments will be as I am definitely going the IBR route and can always pay extra if I have it!  Guess I'll find out soon!

FICO8 Scores as of 8/8/17: EQ-643 TU-644 EX-629
Current FICO8 Scores as of 11/7/17: EQ-675 TU-658 EX-652
Current Mortgage Scores: EQ-686 TU-677 EX-641
Message 3 of 6
Regular Contributor

Re: Ready to be out of default!

My 9th payment was made on 5/19 and yesterday I was able to log in to the Navient website and see my accounts.  Studentaid.gov had shown that Navient would be my services but it took a few days for me to be able to log in and a few more before my loans were visible to me.  Today they emailed me that they would be my new loan servicer and to expect my loan payments to increase.  If I could not handle that I should look into other repayment options (currently debating between the IBR for New Borrowers, PAYE and REPAYE.  Not really seeing much difference amongst the three, just looking for the lowest minimum payments and then planning on paying more every month on specific loans using the snowball method at first and then once the small loans are taken care of (they have the highest interest rates), I will likely switch to the avalanche method.  I have 11 loans total and 4 of them are under $2,000.  Can anyone offer some insight on the biggest differences between these plans?

FICO8 Scores as of 8/8/17: EQ-643 TU-644 EX-629
Current FICO8 Scores as of 11/7/17: EQ-675 TU-658 EX-652
Current Mortgage Scores: EQ-686 TU-677 EX-641
Message 4 of 6
Contributor

Re: Ready to be out of default!

I have a Perkins loan on rehab and it ends September 1st.  I'm so ready for it to be done.  I'm curious about the late payments thing.  The Perkins loan is from my college, but would that found as DOE like you had mentioned?  I had briefly read some things about people having all of their late payments wiped out once they were back in good standing.  I'm hoping the same will happen to me and am curious how much my score will change then.


FICO Scores:
TU:684 / EX:672 / EQ:668
Message 5 of 6
Highlighted
Regular Contributor

Re: Ready to be out of default!

I don't know how it works when the loan is directly through the school.  I think that all of the lates being wiped out is kind of a thing of the past or depends largely on who your servicer was.  I have read that on a lot of older threads, but the more recent ones people don't seem to be having luck with clean trade lines.  I currently have double trade lines, but both sets are reporting as closed, one with a $0 balance and the other with the current balance and being updated as I make my payments.  The student aid website is showing that I am in default and I can't do anything about changing my payment plan until that changes.  Seems to me that if I can log in to Navient and make payments on my account that the default status should be changed with the DOE.  Guess I'll just wait some more...sigh

FICO8 Scores as of 8/8/17: EQ-643 TU-644 EX-629
Current FICO8 Scores as of 11/7/17: EQ-675 TU-658 EX-652
Current Mortgage Scores: EQ-686 TU-677 EX-641
Message 6 of 6