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03-19-2015 05:58 AM - edited 03-19-2015 06:01 AM
Its finally nice to be in a forum where results HAPPEN. I too have just received my permanent discharge letter as of 03/16/2015, because of all the perinent and relevant information sandman has provided I too have begun the CB process of ensuring the negative information is removed/updated accordingly. DL does not have any record of my loans to date, they provided me a phone number for NELNET and after speaking with NELNET CSR, she advised me that the process takes a little longer for veterans discharge process to report to CB because the Dept of Ed pushes the button on our processes. I can honestly say that the bureaucratic process was simple and relatively swift, it took approximtely three months from date NELNET received my application (12/04/2014) until discharge, may have been quicker but I had to submit extra documentation.
So my plan is to challenge my CR at end of this month to see results, i will then check status of dispute at end of April. I will keep you all in the loop, good luck to everyone in this process, be proactive, firm, and diligent and all things will fall into their correct place.
03-19-2015 03:38 PM - edited 03-19-2015 03:42 PM
Hey Everyone!! SERIOUSLY IMPORTANT!!
There is very important information being left out in this discussion.
My score dropped over 100 points after my student loan was discharged ($9, 800.00) a few months ago October 2014. It went from 825 down into the low 700's and 600's. I just started the 3 year monitoring period) because the original loan servicer reported and is reporting that my student loan was "transferred to another office" "transferred" "permanently assigned to the governement" THIS "verbage" is being interpreted by FICO's algorithms as "seriously delinquent, derogatory account" and is "red flagged" I NEVER was late on ANY account of mine in the last 11 years.
All 3 of the credit bureaus have stated that "transferred" is NOT a negative, that my reports are "pristine" NO negative accounts and that they do not understand why "My FICO's" algorithms are interpreting the "transferred" codes 05 and AL, in this negative fashion.
A supervisor from My FICO told me that "tranferred" shows up in their system as "a derogatory because it apprears to the algorithm that you have not appropriately fulfilled your original loan agreement". She told me that if my original student loan servicer does not change or delete the "verbage" of "transferred" and "permanently assigned to the government" THEN my credit score will continue to drop and will be negatively affected for the next 7 years.
I did research and found out that ALL lenders are instructed to report "transfered" as their final code status. This means EVERYONE in this program is affected.
The Dept. of Ed/Nelnet is reporting my account as "closed/paid as agreed" so there's NO red flag there. I called NelNet several times and they don't understand why "transferred" is being interpreted as a negative.
I went to my original loan servicer and currently am awaiting an answer from management as they have never heard of "transferred" being interpreted as a negative, they say they are reporting correctly.
I can assure everyone that you MUST pay attention to this. I was NEVER late on ANY ACCOUNT EVER and my credit reports all reflect this, I paid my loans, then did IBR (Income based repayment option) then deferred, then it was in foreberance til' discharged in October 2014. All other credit cards are all in good standing and my oldest active open card is ten years old.
My score went from 825 to 693, 717, 724 and DROPPING!!
I'm SO frustrated and upset because no one will help me fix this or change the algorithm to honestly reflect the accuracy of my good standing account. IF this is how FICO reports "transferred" it MUST notify ALL credit bureaus AND student loan servicers AND the Dept. of Education so that the Department of Education can notify consumers of this so that they can include a disclaimer or a notice JUST like they have to for the TAXES part. I have no problem having to pay taxes on this, but I DO have a problem paying taxes on this while it's destroying perfectly 11 year history of earned good credit.
I've spent over 30 or more hours on the phone between the three bureaus, several hours and several csrs with "My FICO", as well as credit cards as one card offers a "free" FICO score (and that's how I found out it was dropping, then I came here and ordered my 3 scores/reports after I already had ordered them from each bureau and all were perfect.)
SO all these hours with FICO, all 3 credit bureaus about 5 times for Experian and 3 times for Equifax and once for TransUnion so far and ALL Of them said "transferred" should NOT be a negative EXCEPT for MY FICO.
As a result of this algorithm mix up one of my credit cards decreased my line/limit from $10,000 to $500.00 after receiving this faulty information and then THAT DID lower my score.
However, Experian's Vantage 3.0 scroe has me at 810 "excellent" because the CSR told me that they do NOT consider "transferred" as any kind of negative or out of the original agreement. I was told by the CSR "It says closed, you always paid on time and then it was transferred, I don't understand why "My FICO" would be using "transferred" in a negative way.
I'm NOT calling it quits, I'm taking this fight all the way up through the proper government channels because this is NOT just about me, it's about the hundreds of people out there being taken advantage of that are already disadvantaged due to a disability. This is supposed to help, it's supposed to be a positive, a "win-win". If you get better and can work and earn more than the poverty level, it's reinstated and you pay it back if not then it's "forgiven". NO ONE says it's a negative.
My husband filed bankruptcy 5 years ago and his score is better than mine is right now due to this mess.
I will keep you all posted. I'm on a mission to make sure all involved know how FICO interprets the verbage "transferred". Keep in mind, not all "scoring algorithms" do this but FICO does. BE WARNED!!
I worked SO hard to have an almost perfect score to only have it demolished by "transferred" verbage.
04-05-2015 10:04 AM - edited 04-05-2015 10:07 AM
Last monday I went to my doctor's to have her file out her part for the Total and Permanently Disabled student loan discharge application. Within only two days (fast!), I've noticed I do not owe any money on my loans for the next 3 months. (I decided to quickly pay one remaining sub-loan of $350 off -- I'm hoping it goes through before my application is accepted, that way it will be counted as legitimately paid and I won't have to jump through any hoops for having Uncle Sam pay the loan off for me.)
I have a few questions.
1) It says we may receive the money we paid into the loan from the time our disability started. I was paying the entire time I was disabled, and paid at least $10,000. Do we keep this money, or do we give it back? And if so, to who?
2) If we keep this money, is this taxable too, or just the remainder of the loan that was left when the discharged happened? Which for me is only $9,071.
3) When doing all this [insane] amount of work to remove negative remarks on your credit history, what exactly are we looking for? What remarks are considered bad? What do we tell the credit agencies the remarks should be changed? Do we just tell them that we had a discharge, that the loan was transferred and being paid in full by Telnet, or? I'm very confused.
4) I understand some people saw their credit scores increase, but theirs seemed relatively "new" or low to begin with. Well mine is already in the "Excellent" range: I've been paying off the loans for 7.5 years on time, and the past year I've been paying way more than the minimum due. I can technically afford to keep paying the now-low monthly amounts, but I figured since this discharge service was available to me, why not take it? It wasn't until afterwards that I realize, "Oh, because it might hurt my credit, and eventually hurt me more in the future because of my credit history than simply saving $9,071."
To be honest, I'm almost hoping they reject me so I can continue making the $200 minimum payment. I was just worried because my SSI may end next year since it's up for review, and my Dr. seems to think I'm getting better (but I disagree). But worst case scenario is my dad would pick up the monthly payments, which, by that point, would probably be $120 a month tops.
I don't even mind paying the taxes (if it's on the $9,071 and not the total amount I've paid into the loan while disabled + $9,071). I just want to keep my Excellent credit I worked so hard to build up.
Anyways, lots of long questions, I know. Hopefully at least one person can answer one of them, because I'm so new to all of this. And if it's relevant, I'm not a Vet lol
04-05-2015 11:56 AM
Answers to your questions: I was the one with all the credit drop nightmares so I've sort of become an expert in all of this and hopefully through my mess I can help save someone else the trouble.
First of all they don't go back to when you were disabled by any government standards, such as SSDI for example, they go by when Nelnet accepted your request for disability discharge which is usually only a span of a few months. So if you sent it in a few months ago and they accept it then anything during that time is returned, but you won't know the exact date until Nelnet gives you the info.
I regret doing this because so far all it's done is ruin my excellent credit by THIS one reason: MY FICO uses/interprets the "verbage" "transferred &/or permanently assignned to the government" as if you did NOT fulfill your original loan agreement, this "verbage" is outside of what the algorithm perceives as acceptable SO it interprets it as if it were a derrogatory account AS BAD as if you were "60 days or more delinquent" which is what mine states.
From My FICO'S perspective HERE the ones that you got and paid for on THIS site are going to report as negative as soon as your loan is discharged. AND since you were late in the past, which I never was in the 18 years I was paying on the loans, it will ALSO report THAT, there's a "code" for that.
NOW, this is the confusing part...
EACH credit bureau has their OWN scoring system that IS NOT the same one that YOU paid for here. MY score at Equifax for example, is in the 800's but HERE it is in the high 690's and low 700's. This was the 100 point drop from August FICO score of 825 to under 720 following the discharge in October of 2014.
NOW it gets MORE confusing...
Many of your credit cards follow THIS score of "My FICO"'s algorithm, SO, although my credit bureau sees MY score in the high 800's, one of my credit cards for example, uses the "my fico" system/algorithm and SO my score there is in the low 700's which it should NOT be because I actually have excellent credit if it weren't for the MY FICO ALGORITHMS REPORTING "TRANSFERRED" "PERMANENTLY ASSIGNED TO GOVERNMENT" AS A SERIOUSLY DELINQUENT ACCOUNT!! IT'S CLOSED, PAID AS AGREED BUT THEY WILL NOT FIX THIS.
I'm still waiting for the bank where I got my student loan with to PLEASE change the "verbage" from this "transferred" status to "paid as agreed/closed" if not my credit will be incorrectly delinquent for the next 7 years.
I am going to keep getting my credit reports and scores from the credit bureaus themselves because this is where banks get their info from, NOT "My FICO" .
IF I knew that it was going to do this, which it's NOT supposed to according to ALL 3 credit bureaus AND my original student loan servicers (they said that it should NOT be reporting as a negative, but obviously the FICO algorithm IS doing just that) then someone NEEDS to be held accountable and get this fixed. They CANNOT tell you that it will NOT affect your credit and have NO disclaimer during the process and then it DOES incorrectly report as negative in the algorithm.
The algorithm needs to change OR the "verbage" of "transferred/permanently assigned to the government" needs to change.
Feel free to PM me/email me if you need more help or want to speak further. My student loan was in IBR income based repayment plan, and I didn't have to pay due to my low income from being on SSDI the past 6 years and it was always in great standing. I paid off 90% of my graduate education and only had about $9,400.00 left. But I too thought it was a "win/win" boy was I wrong!
I'm determined to see this through though, not just for me but for the thousands of people that will be negatively affected by this.
I understand that most folks probably defaulted before or were late like you said, but that doesn't go away on the reporting it's included in a code in addition to the "transferred" part. The NelNet part once paid, reports as "paid as agreed/closed" so there's NO problem with Nelnet...it's YOUR original loaner.
I'm mad because I had pristine credit for years and with one mess up I'm taking hours and hours of my time and health to fix this.
I'm wanting to work again and earn $$, so that's another reason why I NEED to fix this for my future.
Let me know if you need anymore info!
04-05-2015 11:58 AM
My SSDI is up for review this summer too, so I'm pretty much in a similar situation that you're in. Please keep us posted!! Thanks! And again anything I can do for you or anyone else who reads this thread let me know. I'm not too familiar with how these boards work but I'll do my best!
04-05-2015 12:20 PM
Thanks for the fast reply.
Shortly before you replied I found out they won't be giving me back money from the time I was disabled and paying, but rather the way you mentioned since I used the Doctor's method to apply. So they'll be given back whatever I've paid in since Monday. So that means I'll be getting $360 back, which is how much is pending to be put in as we speak (after the loan status now reads: "Awaiting Form Administrative Forbearance"). And I'm hoping it goes through before I'm accepted (if I am...hopefully I'm not or I can at least decline or change my mind lol).
I'm wondering: If this $360 payment goes through, which will fully pay back one of my Stafford loans, but then I get accepted and they have to return that money...will they undo me finishing paying off that loan, and have it no longer be considered "Paid in Full" by ME? That's what I'm most upset about: If I only waited a week longer for this process to start I could at least have 1 of my 6 remaining Stafford loans not have negative remarks attached to them.
As for your case, have you tried doing what the guy who spent hours on the phones did? I'm wondering how that would work out for people in our position, who had excellent credit to begin with. Because, no offense to the others, but getting a discharge when you owe an insane amount on loans and you've been making late payments or defaulting is obviously not going to hurt you much (if at all) since you've already demonstrated fairly poor use of credit.
Even if I get off SSI I could still make my monthly payments (with help or doing online odd-jobs if my disability doesn't "get fixed"), so not getting accepted isn't that big of a deal for me now that I've heard credit horror stories. Like I said, it was just a service I heard about and figured "Why the heck not? Let's save $9,000."
I hope you can keep this thread up to date with your experience; maybe by the time I'm accepted I can choose to decline based on how I see your progress going. Maybe it will steadily improve for you within the next month or something.
04-05-2015 12:40 PM - edited 04-05-2015 12:43 PM
Sandman, the disability discharge does NOT improve credit scores it does just the opposite. I don't know who you spoke with but I got my info from a supervisor at My FICO, and it took over 12 calls/service reps to finally find someone that knew what was really going on with my accounts. This is scary how we don't have much control with it all.
If you read my former posts, my student loan was discharged in October, 2014 and immediately following that my original student loan account that was "transferred" to NelNet was reported as "seriously delinquent/or other derogatory reporting" this is due to the "transferred" and "permanently assigned to government" status. The "FICO" algorithms interprets it this way and reports as such. I've NEVER been late on any accounts, including student loans. The government places it it forbearance while your case is being investigated to make sure your credit is protected during the process, so there's no other mix up other than the "status" reported and the algorithm misunderstanding.
All 3 bureaus according to MY FICO are reporting as red flagged "derrogatory" with this original loan holder, Granite State Management & Resources. UNLESS the original loan servicer changes the "transferred" status to something else, MY FICO REPRESENTATIVES told me that it will report as negative for the next 7 years! This is unacceptable.
The FICO rep said there's TONS of people that this is happening to. Discharging your debt does NOT help your credit it ruins it. MIne dropped 100 points immediately following the discharge. NelNet has NO idea of the FICO algorithm so they THINK it's a good thing but it's not. The scores I have with the individual credit bureaus are NOT the same formula that MY FICO is using so on those my score is in the 800's but not on HERE, here they are being negatively/incorrectly interpreted as derogatory simply due to the "verbage" of "transferred".
Otherwise everything else in my report is perfect. Low credit card usage with large credit lines and everything else you need, long credit history etc., is fine, just this one mess up. I don't see it resolving any time soon because of the battle I'll have to have with GSM&R (loan servicer) and also the federal government, federal trade commission, and/or FICO themselves. This is absolutely uncalled for with people being misinformed and I'm going to make sure that all of this mess gets fixed for my sake and for others!
I spent the last 11 years getting my credit up to almost the maximum score and then it dropped just like that. It's not fair and I'm not happy about it to say the least But I've got to do what I can to fix it all.
04-05-2015 12:54 PM
Your welcome! Like I said, anything I can do to help because this has been a total nightmare!
Irony is that I worked as a psychotherapist in private practice for ten years, so I literally helped people for a living and also I could have almost qualified for the other discharges from working with undeserved populations etc., for various other work I did, HIV AIDS caseworker, rape crisis counselor and advocate etc., but these programs weren't out back then.
So, yeah, I agree with you with the "no offense" comment, but yah, when you live in alignment with your integrity and do all the "right" things to pay your bills and follow the process and think, "Hey it's a win/win if I get it, if I got back to working again then I just pay it, cuz' then I'd have the money AND the health" and that's a great thing. Very frustrating. Thanks for your empathy. It's certainly a lonely practice going through it all. I didn't even know about the program until someone at the bank where I had my student loan with told me about it on a phone call I made asking about all the interest accruing! Gee, had I known, but you know, no one would have given me the right information anyway because it wasn't until I got to this point with FICO that I found out the real reason. Even the regular customer service folks HAD NO IDEA what was going on. It shouldn't be such an insidious thing.
Now my husband is doing his taxes and trying to figure out if he has to pay the tax and if so how to figure it all out as he's self-employed (pianist for independent living facilities, retirement communities etc., and creates music for relaxation) and that might push him over the edge of getting his own student loans as he's also going to school part time. So it just keeps growing and growing..the fall out.
Well I'm glad you're figuring out some stuff and I sure hope you can get credit for paying off your loans. Would you do me a favor? And check your reports from the actual credit bureaus too and see what they say after it's all discharged., let me know if you also have that "transferred" verbage or if you get any red flags here at the MY FICO on that original loan account. I'd be curious to see if everyone is reporting the same. NelNet will be no problem, but I'm wondering about the folks where your loan is originally.
Best of luck to you and keep in touch please!
04-06-2015 05:01 PM
I sent you a PM, if you could check them out Seems like most others are done with this topic so I thought this would be the best way to discuss our nearly-identical situations lol
04-07-2015 09:09 PM
Sorry I havent updated but here is my most recent contact, as I stated on my last post my service connected total and permanent discharge was approved on March 16, 2015, with that being said I do not have a monitoring period, now Im not sure if this is a factor for others who are applying utilizing SSDI disaility which does have a three year monitoring period, which may explain the comments "transferred to government" on the credit report, as was explained to me by the Nelnet representative, when the three year monitoring period is up then a perm discharge is awarded, until then, the loans are in a holding status if that makes sense. Im not sure if this applies to any ones siutuation, just a little feedback that may be helpful in understanding this chaotic process.
Last week (04 APR) I contacted nelnet inquiring about the process regarding credit report, i wass told hat as of that date my loans are reported as "paid in full" in Nelnet's system, which will be reported to the CB t the end of tis month, if this is true hten when i run an updated CB May 5, I should see all the status updated to reflect just that, "Paid in Full". Ill keep you all posted, Good Luck and stay on it!!!!!!!!
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