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Posts: 77
Registered: ‎12-10-2011
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[Updated] Loan Rehabilitation - Score Dropped 36 Points

[ Edited ]

Hello all,

 

I have a Perkins loan that has been in default for well over a year.  Back in January of this year I started rehabing the loan with my undergraduate university and have made all payments on time.  I have confirmed with them that I need one more payment and then I will have completed the program.  The rep told me that "all of the negative information would be removed" once I have completed the program.  She specifically mentioned the late payments.  

 

I have not paid the final payment, but I just got an alert that my score dropped 36 points.  I went on CreditCheckTotal and the only difference in the report I have from today and from a week or so ago is that my rehab loan account went from "Closed" and "Collection" with no late payments reported to now "Open" and "120 days past due" with 8 120 day late marks against it.  Any clue why it would be opened right before my final payment?  If it continues in this status and they don't remove any negative information, then it's almost worse that I'm paying now than me leaving it as it was?


FICO Scores:
TU:657 / EX:633 / EQ:661
Regular Contributor
Posts: 246
Registered: ‎02-22-2013
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Re: Loan Rehabilitation - Score Dropped 36 Points

Was your account oriinally serviced by your university, and then closed and put in the hands of a collection agency when you fell to 120 days late?

 

If so, your university might be anticipating your final rehab payment, and that's why they re-opened the tradeline. They want to start collecting their regular monthly payments from you pretty much the instant you finish rehab.  

 

If that's none of this sounds right, then disregard. 

 

You might want to call them and confirm that after rehab, they still plan on removing "all" negative reporting. All they're required to do is eliminate any default notations, so if they promised to remove all lates, that's pretty awesome, and your score will go up in due time. 

 

Hope this helps. 

TU FICO: 778 ||| EQ FICO: 784 ||| EX FICO '08 : 780
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Posts: 77
Registered: ‎12-10-2011
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Re: Loan Rehabilitation - Score Dropped 36 Points


scvbd99 wrote:

Was your account oriinally serviced by your university, and then closed and put in the hands of a collection agency when you fell to 120 days late?

 

If so, your university might be anticipating your final rehab payment, and that's why they re-opened the tradeline. They want to start collecting their regular monthly payments from you pretty much the instant you finish rehab.  

 

If that's none of this sounds right, then disregard. 

 

You might want to call them and confirm that after rehab, they still plan on removing "all" negative reporting. All they're required to do is eliminate any default notations, so if they promised to remove all lates, that's pretty awesome, and your score will go up in due time. 

 

Hope this helps. 


The university owns it and I pay through University Account Services.  It was that way when I first started and has remained that way.  I figured they might just be opening it back up in preparation as you mentioned, but then if they don't remove the late payments, my credit will just be worse off than what it was before I did anything, right?  

 

I think I'm going to email them and ask for clarity and ask about the negative items removal, so that I at least have something from them in writing.  


FICO Scores:
TU:657 / EX:633 / EQ:661
Regular Contributor
Posts: 246
Registered: ‎02-22-2013
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Re: Loan Rehabilitation - Score Dropped 36 Points

Yeah, hopefully, they're just waiting for that final rehab payment from you before fixing up the derogs

 

Mine was serviced by my university, and they transferred it to a 3rd party collection agency, so I was in a little different boat for rehab. 

 

 

TU FICO: 778 ||| EQ FICO: 784 ||| EX FICO '08 : 780
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Posts: 77
Registered: ‎12-10-2011
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Re: Loan Rehabilitation - Score Dropped 36 Points

Just as an update:  I called University Accounting Services and they messed up a few things.  They had the date for the end of my plan wrong even though this had been fixed before.  They also had no knowledge of any change to my credit reporting.  I contacted my University who corrected them on my final payment date, but then they said they checked the reporting and there was no change in the reporting from University Accounting Services or my university, which names no sense, because obviously someone changed the reporting.  Anyways, my university rep confirmed in email that all negative information (including lates) would be removed within 30 days after my final payment.


FICO Scores:
TU:657 / EX:633 / EQ:661
Regular Contributor
Posts: 246
Registered: ‎02-22-2013
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Re: Loan Rehabilitation - Score Dropped 36 Points

Great news when all's said and done!

TU FICO: 778 ||| EQ FICO: 784 ||| EX FICO '08 : 780
Contributor
Posts: 77
Registered: ‎12-10-2011
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Re: [Updated] Loan Rehabilitation - Score Dropped 36 Points

Just an update.  I got an alert and my score on TransUnion jumped 68 points!  Dang!  I'm excited.  They brought it up to date and removed all past negative information Smiley Happy


FICO Scores:
TU:657 / EX:633 / EQ:661

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