Hi all! I have searched the boards and couldn't find any discussions about this...so, here goes:
Rehabbed three SL 6 months ago. I now have 3 rehabbed loans and 3 old loans (duplicates, but not reporting negative). I am getting negative factors against my score because the new SL balances are "too high compared to original loan amount". Anyone else getting this as a negative factor? Anything that can be done about it...such as ask Navient to stop reporting the original loan amount to correct the issue?
Appreciate any info!!
This is typical when new loans are opened. The balance usually does go above the original amount, or is above the percentage that the credit bureaus like to see. Usually with student loan rehab, since the loan was neglected originally, the interest is compounded and added onto the loan. Also I believe they assess an administrative fee. As an example, your original loan amount may have been $5000, but with the compounded interest over the time where no payments were made, the new balance is now $6000. That doesn't change the fact that you were only given $5000.
As you continue to pay down the balance then you will start to see that type of message go away. It's not uncommon for people to get that when they have brand new loans on their accounts, especially if they don't have an older loan that they've paid a considerable amount of money on to counter it. It a much lower impact to your credit score than Credit Card Utilization, but it acts in a similar manner.
It will get better. I think the great news is that you've rehabbed your loans and as time continues to pass, that good history will report and outweight the current "negative" that you are seeing. Great work.