I completely don't understand fico scoring. I have the same issue with three student loans, one lender reporting delinquent and "filed claim with government", and the guarantor on those same exact loans reporting late payments. I recently completed the rehabilitation and the guarantor (as promised) removed their three entries off my credit report but the original lender refusing to. Unfortunately, it only increased by score by 2 points. What's up with that?
An what part of the education act requires the first loan holder to remove their info from my credit record?
i might be wrong, but it's my understanding that both the original creditor & one collection agency can report the same accounts. the only stipulation is that the original creditor has to show a $0 balance, since they sold the account off. but they can show how much you owed them before they sold it.
It's so great that you are in the rehabilitation program! It totally worked for me with both a consolidated and non consolidated school loans (I am in California). Your credit score will jump after the change is made because on a rating scale of significance, defaults carry heavy weight--like an 8-9 out of 10 vs. a late payment which drags you down 4-6 out of 10--which is still awful and depends on the type of credit you were late on. Remember, closing accounts lowers your credit. Store credit is far less favorably looked at when the types of credit you have is evaluated. Stores will also often close your account for no activity. It is best to keep little to no balance on those cards until you get your home loan. It is the credit union (please tell me you aren't still banking with a major bank, especially if you are interested in good home loan rates, turning a new financial leaf, etc.) cards, auto, and home that will make your credit look good. Everyone understands student loans and they can be a good thing in today's economy because they indicate a higher possibility of secure work (lots of articles coming out on that last week and this week about older and more educated/experienced people getting the jobs now)--so long as the repayment history is good and consistent. Yours will be after you've finished the program and demonstrate longstanding accountability. Also, don't apply anywhere or for anything unless you absolutely need to. Inquiries in excess of 2-3 will not look good at all. I know people downplay this all the time, but they are completely mistaken--especially if you are still with a bank. Depending on the type of inquiry, they will take 6 months to 2 years to come off your report. Again, if it is to open a credit union (or, ugg bank) account or for a home, okay a couple, but nothing else for the time being. Really be judicious about who you apply for loans with and who you want to support before incurring inquiries. I grill loan officers and still find that they are shifty just to get business then change their tune later. So, please ask solid questions about your qualifications and who they lend through. Then call that outsourced lender. That said, remember, just because you have a good savings account does not mean the banks will see you as a friend when it comes time to apply for a loan. Many of them outsource their lending and the lenders don't care if you have money in your account. And we aren't out of the woods with the banks' lending policies. I speak from vast experience and years of research and keeping current.
Depending on which credit report you pull, I am at 710-725 and now increasing nicely, but I will never forget the days in the 400s my friend.
Stay consistent and don't rely on old or vague information. Congratulations and Good luck!
Obviously everyone's situation is different, but personally when my Federal Perkins Loan was rehabb'ed my Equifax went up about 40pts... It was a pretty significant difference. I hope yours meets your expectations! Good luck.
As I promised I would do, the following is an update upon completing the student loan rehabiliation program:
I completed my student loan rehabiliation program on Sept 23, 2009, after nine months of payments. On Nov 10th, my Experian account updated to show that the Student Loan acct was current and being paid as agreed. On Nov 13th, my Equifax account updated and showed paid as agreed. On Nov 24th, my TransUnion account updated to show paid as agreed. I couldn't believe it! I was immensely elated.
However, I had two other student loan tradelines that appeared to be duplicates of the one student loan that I was paying through the rehabiliation program. They still had not been deleted and were showing as being in default along with all of the lates.
I was so happy to see though that on Dec 17th TransUnion deleted the duplicate student loan tradelines and on Dec 18th Equifax did so.
Upon completing the student loan rehabiliation program, the updating of my student loan to current/paid as agreed, and the deletion of the student loan tradeline duplicates, I saw my credit score increase on TransUnion a total of 63 points!!! My TU score jumped from 642 on 7/29/09 to 705 on 12/21/09!!!!
Having completed the student loan rehabiliation program is the one of the best things I could have done in terms of my credit. As another MyFico member once wrote to me "What use to be my biggest baddie became one of my best assets!" Also I went from paying about $600 a month during the rehab program to a monthly payment of $248 now that I completed the program.
I am now in a much better position to purchase a home which will hopefully be soon. Stay the course, be patient, and know that a year goes by quickly. Before you know it you too will be elated to see a credit report free of blemishes. It feels good and so worth it.
I understand the default was removed from your credit record but did the other negative history such as "30/60/90 late payments" remain? I am trying to get late payments removed from my student loan and I am desperate!
Yes, once you complete the rehabilitation program, your student loan accounts will show "Currently paying as scheduled". There will be no 30/60/90 late payment marks on your credit. If a person didn't know you went through this program, they can not tell you were late. This is the beauty of the program, once you make all the scheduled payments on time, it reverses all the negative marks on the CR. It took a long time to get to this point, but I will tell you nothing has helped me out as much as this program. Be patient, it will all clear up after while. ***A little success story: After the program, I was eager to go to the showroom and buy a new car. I opted to wait because my parents told me to save and purchase a home. I saved for about a year or so and was approved for a mortgage in Dec 2010. Yea! It has taken me over 7 months to find a home (I purchased a foreclosure, fixer upper) and I will be closing next week. I am so excited and will finally be able to purchase my car in the next few months as well. All this was possible because of the rehabilitation program that fixed my credit! Stay hopeful!
I just recently finished my rehab on July 20th. As of now, the Dept Of Education is reporting a PAA tradeling on all three bureaus, but they are also still reporting all of the negative "duplicates" which is making it look like I owe double, of what I owe. I called the DOE and they explained that those would be adjusted within 60 days of July 20. I'm not sure why they don't just do it all at once, but hopefully they update it soon and all of the negs come off.
I have completed the student loan rehabilitation process as required in may 2011, I was so excited because I felt that I was well on way to reestablishing a good credit rating. My student loan was transferred twice since 2005 and the agreement that I had with Khea under the rehabilitation program did not apply to the original lenders. I called EdFinancial to see what happens next. I was told that I did not sign the agreement with them and all derogatory late payments will remain on my credit score until the several years are up. Khea did do what was promise by updating my credit to the original dated of 2006 in which the previous lender picked up my account, however I am stuck with 14 separated dings on my credit report. The good things is that half will fall off on February 2012 and a couple of more will fall off in August 2012 My score only went up 9 points. Is there anything I can do to change the outcome of what has just happened.
UPDATE: 30OCT12. I received an email from FedLoan Servicing today. I log into their system and they had a statement for me. I double checked everything and all seems to be in order. My first payment is 03NOV12. This is somewhat disappointing because some people received a 1 month deferal. Anyway, its no biggie at this point.
I checked the NSLDS.gov and myfico: no changes as of yet. I will double check again tomorrow.
Here is my story thus far:
I defaulted in 2008. I then asked for a deferrment due to no job. I was denied because I was in default. I went back to work in June 2010. I started rehabilitation. In Jan 2011 I filed BK7, foreclosure in Mar 2011. My 9th payment was due 01FEB10. My attorney said not to pay after he filed (big mistake). He was trying to get my student loans discharged. Judge denied.
I was kicked out of the rehabilitation program and my loan was sent to a different agency. Thankfully they allow me to re-hab again. I started my first payment in Dec11. For some reason, my payments got jumbled at FAMS. My 9th payment was due Sept 1st (I payed it Aug 10th 2012). I called DOE Collections. They removed the 2nd tradeline on 3 loans. My score went up about 20 points 620 to 640. On Oct 1st I made my 10th payment to DOE Collections. On 25OCT12 I called FAMS. They showed 0 (zero) balance which means my load got picked up.
I called DOE and they told me that FedLoan Servicing picked up my loan last week. It takes 15-30 days to get set up in the system. FedLoan has my file but "no payment is due at this time during transition". DOE says they will update my TL and check them in 7 days. Other posts say they update the last Sunday of the month which is 28OCT.
The SL is the only remaining item left on my TL that I can affect and discuss within the rules of this forum. I will be disputing all the others (cant discuss how in this forum) to get my score up. My goal is to have a score of 750, 2 years after BK7 Discharge and foreclosure. I am currently at 677 and I am expecting a 40 point rise for SL, then another 30 points for time and other actions on my CRs. I will keep everyone posted.
Aug 2008 lost job score 750
Dec 2008 Score 750 (still keeping up on all payments)
Jan 2009 (called all OCs and told them I will stop payments to focus on house and cabin)
Jun 2009 defaulted on cabin
Sep 2009 defaulted on house
Jan 2010 Phone ringing off the hook
Jun 2010 Got job making less money
Jul 2010 Started SL Rehab
Dec 2010 Discover filed judgement
Jan 2011 Discover won judgement and froze bank account
Jan 2011 Signed Home Loan Modification. This stopped foreclosure on house
Jan 2001 Filed BK7 No reaffirmations
Mar 2011 Foreclosure on Cabin
Jun 2011 Discharge all debt except for SL ($20,000)
Jul 2011 Apped for Cap 1 and received $500 CL
Aug 2011 Got another job making same money as pre-meltdown without $75,000 in debt )
Nov 2011 Score 550
Dec 2011 Started re-hab again
Sept 2012 Rehab complete Score EQ 677 , TU 670
Oct 2012 SL picked up: no affect yet
Nov 2012 Im expecting a score of 710
Mar 2013 expecting a score of 730
Jun 2013 expecting a score of 750.
I'd like to share some things I've experienced with Rehab'd loans.
First, I was stupid and let my loans go into default. (to the tune of about 40k). Back in 2010, i was contacted by a company that got my 1st student loan (32k) and wanted me to pay on it. At the time, I had a part time job making about 500 a month. However, i accpeted, because i wanted to get out of default. My payments per month were an astronomincal 300 a month.
Bad news, eh? A recipe for defaulting again? Possibly. I wasn't able to pay one month, due to illness... so i called the company and they worked with me. I had to restart the 9 month period, but that was alright, because no matter what, the loan was going down. I got out of the 9month period in Feb. of 2012. A good company that works with ACS picked up my loan at a low interest rate, 3.125, and dropped my payments to 216 a month. Difference is, now I have a better job, making 6 times the amount i used to make a month!
Now, to continue, my other loan, a 2500 loan with the Dept of Education was also in default. I was contacted by Van Ru, and rehabed that loan at 75 a month begining of Feb, 2012. I am happy to say that i payed 300 a month on that, (minus fees, etc) and now there's only 400 left, and OUT OF REHAB! The DOE has that loan again (though Salle Mae) and at an interest rate of 2.39. (IT will be paid off this month!)
There is hope to get things cleared up. Before the loans were out of rehab, i was denied credit left and right. No store or Credit card company gave me the chance. Until last month. I noticed, when i was denied credit back in mid november, that my report said VAN RU, for my lender. TWO WEEKS LATER, i checked again after I got word that my loan status changed, and low and behold, van ru was gone, and Salle Mae was there, and current. Out of a whim, I applied for a BestBuy credit card. I was approved. I also applied for a walmart card. Approved.
Now, mid december, I have been approved for multiple lines of credit, ranging from 200 to 1,000. I only use the Best Buy Mastercard, with its low 300 limit for gas purchases. And pay it off the next paycheck.
There is hope! Once your loans are rehab'd, take it easy and rebuild credit carefully. I probably won't use the other Cards i was approved for... but if i do, it'll be repsonsibly. My DIT (Debt to Income Ratio) is at 7 percent, and I plan on keeping it that low!