Ck7 Discharge--Student Loans to pay or keep in deferment?

[Anonymous]

Hi everyone,

I've been a long time lurker and today I found myself with a question I can't seem to find an answer for (I've read it all on here HA!). I recently received a discharge from Ck7 (Aug.16th)  and all my student loans (I have 5- all from Nelnet-total balance of ~15k combined) are reporting 0 and included in BK. I know that they will all start reflecting their actual balance as soon as I start repaying them. I received a notice from Nelnet saying that I'm in deferement until Oct. 2021. 

My question is --- Does it make a difference in my Fico score if I start paying them NOW- assuming that they will reflect a balance if I do? Or is it better to keep them as they are 0-balance and in deferement, positive reporting (green) but not really doing much to add to my credit?

For more context, I burned the following:

Cap 1-- 500 (no luck on the prequal)

Discover secured- 300 (no luck on the prequal)

Navy federal-  go rewards CC- 15k (will miss forever- they are truly amazing)

Merrick- 500 (I hate this bank. worst CS ever)

Navy federal auto loan- returned the car -loan was for 34k (I no longer have navy fed)

Current Fico Scores: 

Experian 585

Transunion 529

Equifax 543

Vantage Scores/FAKOs:

Transunion: 657 

Equifax: 602 

Current credit profile:

1-Zales/commentity bank authorized user - 5k limit ($400 due) reporting on all 3.

2- Capital One- 5k limit with 1.5k used  Authorized user (when this started reporting it increased my experian score by 20 points even with a balance).

3-All my student loans as positive by 0 balance.

---side note: about 20 days ago I applied for a Credit One Credit Card  (I know the hard pull was painful but I am trying to follow the road to 700 in 24 months thread) I was approved for $500 but they have yet to send the card out...I called and they said that they are generating the card number so still in the process of creating it on their back end... weird 

In addition to the question around my student loans, what I else should I do to help my fico scores increase? 

I appreciate everyone on here so much! Reading this has kept me sane. 

Thanks,

Steph

[2b2rich]

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@Anonymous wrote:

Hi everyone,

I've been a long time lurker and today I found myself with a question I can't seem to find an answer for (I've read it all on here HA!). I recently received a discharge from Ck7 (Aug.16th)  and all my student loans (I have 5- all from Nelnet-total balance of ~15k combined) are reporting 0 and included in BK. I know that they will all start reflecting their actual balance as soon as I start repaying them. I received a notice from Nelnet saying that I'm in deferement until Oct. 2021. 

My question is --- Does it make a difference in my Fico score if I start paying them NOW- assuming that they will reflect a balance if I do? Or is it better to keep them as they are 0-balance and in deferement, positive reporting (green) but not really doing much to add to my credit?  - I don't believe that being in deferrment will keep the balance at zero, unless it is a ch7 thing.  Mine were in deferrment at times and always showed the actual amount of them the entire time.  This is important so that creditors know your obligations when they're deciding whether to extend credit to you, even if the next payment due date is 2 years away.  (sorry I can't help with the scoring on this).

For more context, I burned the following:

Cap 1-- 500 (no luck on the prequal)

Discover secured- 300 (no luck on the prequal)

Navy federal-  go rewards CC- 15k (will miss forever- they are truly amazing)

Merrick- 500 (I hate this bank. worst CS ever)

Navy federal auto loan- returned the car -loan was for 34k (I no longer have navy fed)

Current Fico Scores: 

Experian 585

Transunion 529

Equifax 543

Vantage Scores/FAKOs:

Transunion: 657 

Equifax: 602 

Current credit profile:

1-Zales/commentity bank authorized user - 5k limit ($400 due) reporting on all 3.

2- Capital One- 5k limit with 1.5k used  Authorized user (when this started reporting it increased my experian score by 20 points even with a balance).

3-All my student loans as positive by 0 balance.

---side note: about 20 days ago I applied for a Credit One Credit Card  (I know the hard pull was painful but I am trying to follow the road to 700 in 24 months thread) I was approved for $500 but they have yet to send the card out...I called and they said that they are generating the card number so still in the process of creating it on their back end... weird 

In addition to the question around my student loans, what I else should I do to help my fico scores increase? 

I appreciate everyone on here so much! Reading this has kept me sane. 

Thanks,

Steph

---

[Anonymous]

Yeah they are all $0 and placed under chapter 7 bankruptcy. So they aren’t reporting a balance... that’s where my question comes from... I could assume that once I start paying them they will show up a balance and start reporting again but I have no idea if that’s going to affect my Fico score or will it help it because of reporting trade lines?

[Anonymous]

I don’t know this for sure, but I’m going through the same situation as you right now. My discharge was earlier this month and I’ve been paying on my student loans each month throughout the whole process. As of right now, they’re still reporting $0 balances and included it bankruptcy. It seems like they may just go back to normal reporting a month or so after discharge. Hopefully I’ll know for sure soon!

[FireMedic1]

Most SL's wont report a balance during a BK from filing date to DC. There's more lingo to it. Once the DC is completed. They will go back to reporting as they were before the file date. So they will return. But keep on paying no matter what. @calyx is really good at explaining more in depth when it comes to SL's.

[Anonymous]

Thanks! Totally appreciate your answer. It’s been 40+ days since discharge and I haven’t seen a change in them. I know paying while in deferment is good because at least I’m not collecting interest. I’m just curious to know if once they report a balance will Fico score change. Granted right now all my loans appear $0. So technically I don’t have any active loans.

[calyx]

I think (but can't swear) that it will improve your score, because you'll have active loans at that point (mine were not involved in a BK, but when I went from closed/derog accounts to consolidating so I had an open account, I got a sizable hike in my FICOs - I can't tell you how much, because a lot was happening, though I think the bulk of my points came from adding an open installment).

Installment loans utilization is considered in aggregate; assuming this is/are your only loans, you won't really see a bigger score bump until you get them (collectively) below 9%.    And yeah, keeping your interest down is awesome.  Good on you for paying, even though you don't technically have to!

[Anonymous]

Thank you! I’ll contact Nelnet and I’ll post how it updates in 30 days.