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Student Loan consolidation after BK?

fishyspice
Established Member

Student Loan consolidation after BK?

Hi,

I was wondering, has anyone consolidated their private student loans after bankruptcy?  I went to my credit union today to inquire about this and they told me that although they can do it, they don't recommend it because "credit unions don't have competitive rates when it comes to student loan consolidations."  She quoted me a rate of 13%.  I just tried a pre-approval with SoFi and was denied reason given: bankruptcy.  So, has anyone consolidated their student loans after bk and can recommend a lender?  My bk was filed 1/2018 and *finally* discharged 10/2018.  If I get any good advice or have success I'll post it here to help others in future.

Message 1 of 8
7 REPLIES 7
Kathyups
Regular Contributor

Re: Student Loan consolidation after BK?

I contacted my loan servicer and requested a consolidation. I don't believe that mine were private loans though because I requested that they be consolidated through Nelnet. Once the consolidation was approved (as my chapter 7 was discharged), my credit scores jumped 151 points in just over 30 days. I expect them to go up even more since I am making my payments on time. Hope this helps.
Chapter 7 DC 10/23/18
Starting FICO 8 11/22/18

Current FICO 8 9/28/20

GOAL 680 by 12/20
Current FICO 9 7/28/20

Student loans and car payments reporting positive



Message 2 of 8
MyDataMyChoice
Valued Contributor

Re: Student Loan consolidation after BK?

What are your scores?


Message 3 of 8
Kathyups
Regular Contributor

Re: Student Loan consolidation after BK?

My scores went from 480 before chapter 7, to 519, to now 666 through Creditwise and Nerdwallet. But.. I am not sure how accurate those were (are) as I checked through Discover and they are only saying 542 now, but Discovers score is not showing updates with the chapter 7 yet.
My discharge was over a month ago so I am not sure what's going on. I was approved for an unsecured Capital One card and a Secured Discover so they can't be too horrible. I plan on asking someone on the forums why there is such a difference in the scores.
Chapter 7 DC 10/23/18
Starting FICO 8 11/22/18

Current FICO 8 9/28/20

GOAL 680 by 12/20
Current FICO 9 7/28/20

Student loans and car payments reporting positive



Message 4 of 8
fishyspice
Established Member

Re: Student Loan consolidation after BK?

OK, so I spoke with the loan officer at my credit union.  She was not able to approve me for the student loan consolidation.  The reason was that I do not have enough accounts and payment history since my BK was discharged.  She said it's good that I have an auto loan but that I should open one or two credit cards and reapply in the future.  I asked her how long in the future and she said there was no particular time, that when I re-apply for the consolidation loan she and her team will again look individually at my credit report.  She also told me that my score is really good and is not a problem.  (The letter I got from the credit union said my Experian score is 703 how is that possible?  When I got my Experian score from myFico it was 575).

To answer some others questions: this was specifically to consolidate two high interest student loans. 

 

So in summary, there is hope!

Message 5 of 8
FireMedic1
Super Contributor

Re: Student Loan consolidation after BK?


@Kathyups wrote:
My scores went from 480 before chapter 7, to 519, to now 666 through Creditwise and Nerdwallet. But.. I am not sure how accurate those were (are) as I checked through Discover and they are only saying 542 now, but Discovers score is not showing updates with the chapter 7 yet.
My discharge was over a month ago so I am not sure what's going on. I was approved for an unsecured Capital One card and a Secured Discover so they can't be too horrible. I plan on asking someone on the forums why there is such a difference in the scores.

Those 2 websites are FAKO scores. (Vantage) They mean nothing. FICO is the only one that matters. Check all 3 at Credit Check Total for $1 and cancel before the trial is up. You got 2 great cards to start off with. Treat them right and your profile will grow.





Homeowner since Sept 2020. My posts are JMHO. My siggy is not to brag. Just sharing my experiences after BK from learning here from rebuild to recovery from the @ 540's.
Message 6 of 8
dynamicvb
Valued Contributor

Re: Student Loan consolidation after BK?


@fishyspice wrote:

  She also told me that my score is really good and is not a problem.  (The letter I got from the credit union said my Experian score is 703 how is that possible?  When I got my Experian score from myFico it was 575).

 

There are a lot of different versions of Fico, so likely she was looking at soemthing besides your Fico 8 which you see on the dashboard. If you have a subscription look at the other score versions and you may be able to pick out which one they pulled. 

 

Started Rebuild 4/2018: EX 616| TU 604| EQ 621

Current 5/28/20:


First Goal Score: 750+ Reached 3/2019

Next Goal all over 800
Message 7 of 8
leonel9
Frequent Contributor

Re: Student Loan consolidation after BK?


@fishyspice wrote:

The letter I got from the credit union said my Experian score is 703 how is that possible?  When I got my Experian score from myFico it was 575).

 


I'd hold off on applying for any more private student loans until you find a lender that you know for sure will aprove a recent bankruptcy. I would bet money that there aren't any (sorry to be a downer). It's hard enough to find good credit cards to get 1 month after bankruptcy -- so I think it's unlikely that you will find a lender will consolidate student loans less than 2 years after discharge (but more likely 5). 

 

As far as your score goes, did the letter say it was a FICO score? Custom scoring models are all the rage right now. It's entirely possible that your credit union is using a custom score that uses your Experian credit report to calculate, but is different from your Experian FICO score. 

 

Often time the range provided in the denial letter will give you a good indication if it's a FICO score or something else. If, for example, the range is 300-900, then it's unlikely the score reported is a FICO, as the range for a FICO is 300-850

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