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New Contributor
ash4life
Posts: 52
Registered: ‎11-19-2012
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Re: Student Loan Rehabilitation And The Effect On Tradelines

UPDATE!!

I paid my last rehab payment to Dept of Ed on April 1st, 2013. I have a FFEL student loan. I checked the NSLDS website this morning and I am officially out of default. Dept of Ed shows all paid and cleared the balance. Salie Mae has picked my loan up and I start my payments with them again May 15, 2013. 1 dollar less tnan what I was paying in rehab. I hope my tradelines in my credit report will be updated to positive in May. I.E. hopefully the collections is wiped clean. I need a serious jump to get my home loan. TU: 670 EX: 613 EQ: 614. My lender said she needs a 640 for the middle score. In November my EX: was 579. So I have been jumping with the collections from Dept of Ed still reporting,

Does Sallie Mae have to wipe clean the past negatives?

Established Member
cardsrams82
Posts: 36
Registered: ‎03-22-2009
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Re: Student Loan Rehabilitation And The Effect On Tradelines

They don't have to drop the lates, just update the status as not being in collection or pays as agreed. Either way getting the negative status helps. Looks like we are both in the same situation. Recently finished rehab, have a new lender, waiting on update so we can get a home loan. I talked to a loan officer and got some additional info, maybe it'll be  useful:

Rapid rescore is not an option since I have so many tradelines that will be updated. The expense is something like 600 bucks, so I'm forced to wait. Hopefully if the info about the 3rd sunday update is correct, that update will be this Sunday.

FHA guidelines are very strict when it comes to default. If your report shows default status, automated underwriting for FHA will promptly deny you. Even if the NSLDS shows no default, you gotta wait for that report to update.

620 can get you a home loan, but the regulations from FHA at that score are stupid, 640 is what they say is min cuz FHA has alot less regulations.

Make sure you have the downpayment amount in your banking accoutn before applying.

They pulled my scores: 715 TU 621 EXP 570 EQ
Which is dumb, I hate seeing a 715 score and fighting for 19 points. TU reports no collections and only half the defaulted loans. Experian is the most accurate, reporting a couple paid medicals and all of the defaulted loans. Equifax isn't reporting any of my positive revolving (CC) TLs. Though I have had the companies send them updates and they are suppose to update that info. I personally went from 480s in October to these scores, so the rebuild process definitely pays off.

I believe when my first rehab went through last year that, with 4-5 tls reporting and updated, that I got a approximately 60pt jump.

The waiting game sucks. Work for months clearing this up, finally meet their requirements, and now my life is on hold waiting for a freaking report update.

Established Contributor
kjel
Posts: 543
Registered: ‎11-27-2012
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Re: Student Loan Rehabilitation And The Effect On Tradelines

+1 I am sitting and (im)patiently waiting.

 

I've been picked up by Nelnet and my first payment is due at the end of May. NSLDS is clear of the default but not my CRs.

 


Starting Score: TU: 549 | EQ: 549 | EX FAKO: 541
Current Score: TU: 664 | EQ: 722 | EX: 722
Goal Score: 720s All Around!
Last HP 11/10/2014

New Contributor
ash4life
Posts: 52
Registered: ‎11-19-2012
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Re: Student Loan Rehabilitation And The Effect On Tradelines

Cardsram82:

Thanks for the info. I'm going with a USDA loan so I won't need a down payment. TU seems to be the lamest CRA. I only have 4 "in collections" in my EX report. Those are through the Dept of Ed. My Sallie Mae shows paid as agreed and they are the ones picking up my loan again. So, it appears I just have to wait for the Dept of Ed "in collections:" to be updated to paid as agreed and it will show account closed. I really hope that will jump me to 640. 26 points away. I have heard of 20-80 point jumps when collections are taken off.

I can't seem to get an answer from people here to share their jumps. I just want to get an idea. I was gonna do a rapid re-score but the CRA's are behind and it will take 14 days. So, 3 weeks to go to see if I jump. I won't do the rapid rescore. If I lose the house my wife and I want, so be it, I guess.

Regular Contributor
hopingsoon
Posts: 231
Registered: ‎03-09-2013
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Re: Student Loan Rehabilitation And The Effect On Tradelines


cardsrams82 wrote:

They don't have to drop the lates, just update the status as not being in collection or pays as agreed.  


I'm confused on this. My rehab letter (from the CA who was acting/collecting on behalf of AES/PHEAA) says "all negative information will be removed". 

 

I made my 9th payment on March 15th. I have received my letter from AES/PHEAA about being out of default. My first payment is due May 15th. NSLDS still has not updated.

 

My loans were showing duplicates on my CR. One for the original TL now CO and one for the collection account. But they both said AES/PHEAA not the CA. The collection accounts have now been removed from my CR but the origninal TL with the lates and the CO are still there. It shows as closed with a $0 balance.

 

I got a bump when they were removed because 2 CAs were removed as well as about $2500 of debt. I'm kind of annoyed at this. I wish they would have just corrected all the CR information together instead of changing part of it and having to wait for the other part to be updated. 

 

I was thinking about paying early to try to get that ball rolling...any thoughts?



Starting Score: FAKOs EQ 537 TU 497 EX 517
Current Score 7/11/13: FICOs EQ 650 TU 659 EX 655
Goal Score: 675 Who am I kidding? Goal Score: 750+ :smileyhappy:


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Regular Contributor
hopingsoon
Posts: 231
Registered: ‎03-09-2013
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Re: Student Loan Rehabilitation And The Effect On Tradelines


cardsrams82 wrote:


I believe when my first rehab went through last year that, with 4-5 tls reporting and updated, that I got a approximately 60pt jump.




How did those TLs look after the update? Some people report all the lates being removed, was that your experience?



Starting Score: FAKOs EQ 537 TU 497 EX 517
Current Score 7/11/13: FICOs EQ 650 TU 659 EX 655
Goal Score: 675 Who am I kidding? Goal Score: 750+ :smileyhappy:


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Established Contributor
kjel
Posts: 543
Registered: ‎11-27-2012
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Re: Student Loan Rehabilitation And The Effect On Tradelines


hopingsoon wrote:

cardsrams82 wrote:

They don't have to drop the lates, just update the status as not being in collection or pays as agreed.  


I'm confused on this. My rehab letter (from the CA who was acting/collecting on behalf of AES/PHEAA) says "all negative information will be removed". 

 

I made my 9th payment on March 15th. I have received my letter from AES/PHEAA about being out of default. My first payment is due May 15th. NSLDS still has not updated.

 

My loans were showing duplicates on my CR. One for the original TL now CO and one for the collection account. But they both said AES/PHEAA not the CA. The collection accounts have now been removed from my CR but the origninal TL with the lates and the CO are still there. It shows as closed with a $0 balance.

 

I got a bump when they were removed because 2 CAs were removed as well as about $2500 of debt. I'm kind of annoyed at this. I wish they would have just corrected all the CR information together instead of changing part of it and having to wait for the other part to be updated. 

 

I was thinking about paying early to try to get that ball rolling...any thoughts?


Save the letter! Someone else here was able to dispute on that basis. I didn't get so lucky, mine just said "default status will be removed".

 

My CRs currently reflect a closed and transferred TL for US Dept Ed Direct Loan Consolidation Subsidized and Unsubsidized, it then has another TL showing the default under US Dept Ed but with the collection agency's mailing address even though their name (CBE Group) doesn't appear anywhere.

 

As soon as I see some activity I am going to post because I think it's helpful for people to see. DoE and the CAs due a piss poor job of explaining what things should look like when it's all done. Frankly, I don't even think they really know.

 

Hang in there.


Starting Score: TU: 549 | EQ: 549 | EX FAKO: 541
Current Score: TU: 664 | EQ: 722 | EX: 722
Goal Score: 720s All Around!
Last HP 11/10/2014

Established Contributor
InvincibleSummer3
Posts: 640
Registered: ‎11-20-2012
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Re: Student Loan Rehabilitation And The Effect On Tradelines

[ Edited ]

I agree, Kjel. And honestly? I've been going back & forth over the way mine have been reporting since they came out of rehab. My understanding, based on the statute, is that ALL references to the default must be removed. Which means the comments should not indicate that there ever was a default,  etc. If there is mention of a chargeoff or a default - should that not be removed??

 

No one seems to know. Well, except that in cases where there's some subjectivity, you're supposed to go by the actual law....there's that.

 

ETA - this is the citation of the actual statutes involved, h/t to Chrisoncoffee for posting these a while back:

20 USC § 1078–6 (C)

Upon the sale or assignment of the loan, the Secretary, guaranty agency or other holder of the loan shall request any consumer reporting agency to which the Secretary, guaranty agency or holder, as applicable, reported the default of the loan, to remove the record of the default from the borrower’s credit history.

 

34 CFR § 682.405   (b)(2)

The guaranty agency must report to all national credit bureaus within 90 days of the date the loan was rehabilitated that the loan is no longer in a default status and that the default is to be removed from the borrower's credit history.

 

the applicable law for FFEL (stafford) loans is  20 USC § 1078–6, found here http://www.law.cornell.edu/uscode/uscode20/usc_sec_20_00001078----006-.html

the applicable regulation for FFEL loans is 34 CFR. § 682.405, found here http://law.justia.com/us/cfr/title34/34-3.1.3.1.40.html#34:3.1.3.1.40.4.40.6

the terms for rehabilitation of perkins loans are essentially the same as stafford

Regular Contributor
hopingsoon
Posts: 231
Registered: ‎03-09-2013
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Re: Student Loan Rehabilitation And The Effect On Tradelines

Nevermind I just looked over the letter again it says upon rehab they will notify the big 3 to delete any adverse reporting by aes in relation to my default. Kind of annoying considering that 20 "120 days past due" are most definitely "in relation to" my default considering they are what caused the account to be CO and considered default. And having an account that continues to report 20 "120 days past due" is just as bad IMO as the default status. If this is the case and nothing can be done to remove the old lates. I'd rather they just junk the old TL and start brand new. I think that would be fair. 6 months of on time payments on a new TL and I have improved my score rather than waiting 7.5 years for all the 120 day lates to age off.

 

I will definitely post back when my rehab and CR are resolved completely. I agree it helps to read other's stories.



Starting Score: FAKOs EQ 537 TU 497 EX 517
Current Score 7/11/13: FICOs EQ 650 TU 659 EX 655
Goal Score: 675 Who am I kidding? Goal Score: 750+ :smileyhappy:


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Established Member
cardsrams82
Posts: 36
Registered: ‎03-22-2009
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Re: Student Loan Rehabilitation And The Effect On Tradelines


hopingsoon wrote:

cardsrams82 wrote:


I believe when my first rehab went through last year that, with 4-5 tls reporting and updated, that I got a approximately 60pt jump.




How did those TLs look after the update? Some people report all the lates being removed, was that your experience?


Mixed bag. Sallie Mae removed lates, but they picked up the loan after it rehabbed, and then it got sent to dept of edu and consolidated. Nelnet, Edfinancial, and Mohela report Pays as Agreed but still show the lates. I think a rule of thumb is that if your new lender is the same as your previous, you're more likely to have negative history removed. If any of the previous TLs are not your new lender, it seems they update current status and status as of start date of rehab, but nothing prior. 


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