Rehabilitation: Student Loan Reporting Problem

[Anonymous]

Good afternoon,

I have recently been going through the rounds with creditors on my report, and I have successfully crushed ~$2,500 worth of debt in this past month. Today, I felt it was necessary to take on two defauted loans that total ~$4,000 combined because when I was combing through my TransUnion report, I noticed that the $5/month rehabilitation agreement that I entered into with Action Financial Services at the end of May 2017 has been incorrectly reported every month since I started the arrangement. When I say "incorrectly reported", I'm saying that they are only reporting $2 paid per month instead of the $5. 

I'm not overly concerned with this issue, because I have been saving and highlighting the transactions on my bank statements since the very beginning, so there is proof that I have been paying the required amount every month. When I inquired into the issue this morning with the Department of Education, the representative told me that I should dispute the records, but my question is, should I wait until the 9 payments are made (I'm currently going to make my 6th in October) before filing a dispute? If they try to deny me and say that I have not completed the loan agreement, then I have proof and may be able to kill two birds with one stone if I wait (having them concede and then removing the default status, etc.)

Any advice would be appreciated. Thanks. 

[Anonymous]

After I completed loan rehabilitation, all of my old tradelines were deleted and replaced with new/clean ones by the new servicer with no payment history.  In the end it may not matter anyways, but what you are really looking for is that your payments are being reported.  You said that you have two loans, are they reporting $2 on each loan or a total of $2?  Credit reporting also tends to use rounding, so maybe because your $5 payment is split in two and assuming those payments are split equally, each payment is under $3 and reported as a $2 payment.  I have never seen cents reported on my reports.  

My experience of anytime I call and ask about anything like this, the representative just tells me to dispute it, simply because I disagree with or don't understand the reporting, not because it has been reported wrong and will be corrected.  In this case, I don't think it is something you need to dispute now, just dispute your tradelines once you have completed rehabe in a few months.

Congrats on making it this far!  If used wisely and the opportunity is not wasted, the student loan rehabilitation program is a great thing!

[Anonymous]

I appreciate the comments, and thank you for the advice. I may just be a little angsty, so I will put off disputing the loans for now until the rehabilitation agreement is finished. I started taking my credit seriously as soon as March rolled around, after my ex-wife and I first filed for divorce. Since then, there's been a fire lit under my keister and all I can think of is "fix everything". In the very least, this attitude has helped me raise my score 200+ points from the very bottom of the barrell (I'm talkin' high 300's). Now I see that the only thing left standing in my way is this default. 

[Anonymous]

I feel your pain.  My 9 months in SL rehab were the longest of my life, that is until I was done and waiting to see what would happen with my tradelines, then the Earth stood still.  Clearing up the default will improve your scores tremendously, especially if you have been working on other derogs as well.  I wasn't quite as bad as you, honestly don't know what my FICO scores were when I started rehab, but I do know my VS were bad, now three months post-rehab and my scores are high enough to get me an approval for a mortgage.  Granted there was quite a bit of other work done along the way, but by far the biggest help was getting the default removed and starting with fresh tradelines.  

Good luck on your journey and keep us posted!

[sml1997]

Great thread and thanks for sharing. How long does it take between the time you finish your 9 month rehab and then actually getting the update on the credit report? I finished my rehab about a month ago and I'm very excited to see where it takes my credit. I just pulled my credit reports and the trade lines have not been adjusted, but then again it's only been 30 days. My loans have been picked up by another lender so I'm thinking that's a good thing.

[LindysMom]

I agree to wait it out.  Right now the biggest battle is patience on completing the rehab.  It took 3-4 weeks once I completed my rehab to see anything adjust back to normal on my credit report.

You likely know this, BUT, rehab is a one-time deal.  If you go into default again, you don't get another rehab.  Stay committeed to the process, it's worth it.

Good luck!

[Anonymous]

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@sml1997wrote:
Great thread and thanks for sharing. How long does it take between the time you finish your 9 month rehab and then actually getting the update on the credit report? I finished my rehab about a month ago and I'm very excited to see where it takes my credit. I just pulled my credit reports and the trade lines have not been adjusted, but then again it's only been 30 days. My loans have been picked up by another lender so I'm thinking that's a good thing.

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If I remember correctly, mine was right around a month or so, but I think the biggest factor is how long it took for your loans to get picked up and who they were picked up by since there will be differences in reporting dates for different servicers.  Mine were picked up within a week or so by Navient.

[Anonymous]

I completed the rehabilitation process back in January if memory serves me correctly. Now what's interesting is that the original loans updated to report on Experian as "Unknown" (which reflects a positive neutral tradeline), but Equifax and TransUnion are showing a negative payment status, which reflects as both negative tradelines. The variation of which NelNet (or the DoE) reported to the three bureaus is a little suspect, in my opinion. Because of this, my FICO8 scores are around 15-20 points from each other; Experian the highest, TransUnion coming in second and Equifax being the lowest.

[beutiful5678]

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@Anonymous wrote:

I completed the rehabilitation process back in January if memory serves me correctly. Now what's interesting is that the original loans updated to report on Experian as "Unknown" (which reflects a positive neutral tradeline), but Equifax and TransUnion are showing a negative payment status, which reflects as both negative tradelines. The variation of which NelNet (or the DoE) reported to the three bureaus is a little suspect, in my opinion. Because of this, my FICO8 scores are around 15-20 points from each other; Experian the highest, TransUnion coming in second and Equifax being the lowest.

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Hmmm, once you complete rehab the accounts should no longer be reporting as delinquent (unfortunately, the late monthly payments remain). Once rehab is complete, I believe they have 45 days to remove the delinquent status. If the 45 days have passed I would dispute the accounts on the bureaus that are erroneously reporting the loans as delinquent.

[Anonymous]

I completed rehab in Feb 2018, about a month later my credit scores jumped as the accounts changed from delinquent to current. Then They were transferred to NelNet as the new servicer. Now on my report is has all of my student loan accounts listed twice, both as current/good standing AND closed/delinquent which is dragging my scores back down. Is this correct? It just updated that way on my report this week. Should I call NelNet, dispute through credit bureau or wait to see if it corrects itself?