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I wonder. Paying owed collection make it reappear on CR?

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Contributor

I wonder. Paying owed collection make it reappear on CR?

So I recentely disputed a student loan that's in collection with fedloan servicing and showing on TU. Two days later they deleted it. My question is, if I pay the collection, is it possible that Fedloan servicing will report it as paid to the CR and then it's back. Should I just forget about it? 

 

I disputed the item because I first defaulted on the student loan over 7 years ago, but i entered the reharb program and then defaulted again, so they re aged the account to show it originally going into default in 2013 instead of 2007. 

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Valued Contributor

Re: I wonder. Paying owed collection make it reappear on CR?

I can't say about it reappearing (generally it won't if it paid), but by doing the rehab the account was brought current (which cancelled that DoFD) so the new DoFD would be the second time you defaulted.
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Legendary Contributor

Re: I wonder. Paying owed collection make it reappear on CR?

If its a federal student loan, the exclusion date of an unpaid collection is not based on the normal max of 7 years plus 180 days from DOFD.

It is extended under overriding provisions of the Higher Education Act while the debt remains unpaid.

 

If you are seeking credit report exclusion then you must pay the debt.

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Contributor

Re: I wonder. Paying owed collection make it reappear on CR?

I was under the impression that only fed Perkins Loans were an exception when it came to the 7 1/2 years fall off date? All other student loans fall off after 7 years of default right?

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Valued Contributor

Re: I wonder. Paying owed collection make it reappear on CR?

All federal student loans have different exclusion rules.
Message 5 of 12
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Frequent Contributor

Re: I wonder. Paying owed collection make it reappear on CR?


@ohnomyfigo wrote:

So I recentely disputed a student loan that's in collection with fedloan servicing and showing on TU. Two days later they deleted it. My question is, if I pay the collection, is it possible that Fedloan servicing will report it as paid to the CR and then it's back. Should I just forget about it? 

 

I disputed the item because I first defaulted on the student loan over 7 years ago, but i entered the reharb program and then defaulted again, so they re aged the account to show it originally going into default in 2013 instead of 2007. 


Good Morning ohnomyfigo,

 

As others have stated the exclusion date for federal student loans are different than many other types of loan exclusions.

 

My experience has been that the federal student loan collection will stay on until it is paid and until after the DFOD passes.  Are you saying that you successfully rehabbed the loan by making 9 payments on time in a row?  If so, then the loan came out of default, and any late payments reported before the default will not be removed from your credit history until the normal exclusion period.  The defaulted status (collection) however will be removed- just not any late payments prior to the default status.

 

If I am interpreting things correcting you successfully rehabbed (which means the loan was no longer in collections and you could secure additional federal student aid and loans), and then you later defaulted a second time.  If this is the case, then yes the dates will have changed for DOFD- because the first collection status was removed from your credit report.

 

I would say though that it is always wise to pay federally backed student loans because normal exclusions do not apply to these types of credit lines.  I would pay it in full as quickly as possible.  That is the only way to make it truly go away!  Not to mention the fact that the US Goverment can garnish your wages.  Then both you and your employeer knows and I do not like my employer knowing anything like that about me!


Starting Score: EQ 593, TU 600, EX 612
Current Score: EQ 850, TU 850, EX 843
Goal Score: EQ 750, TU 750, EX 780


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Re: I wonder. Paying owed collection make it reappear on CR?

Thanks for the reply.

 

No I did not successfully rehab. What happened was I rehabed but after 3 payments I defaulted on the rehab so the account was reaged to reflect the last default date. 

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Frequent Contributor

Re: I wonder. Paying owed collection make it reappear on CR?


@ohnomyfigo wrote:

Thanks for the reply.

 

No I did not successfully rehab. What happened was I rehabed but after 3 payments I defaulted on the rehab so the account was reaged to reflect the last default date. 


You're more than welcome ohnomyfigo,

 

*Yikes* - So it did not rehab then Smiley Sad

 

If it were me, I would certainly try to get that paid off just as soon as I possibly could.  I might consider taking out a separate loan to pay off the defaulted loan- if that is manageable and doable.  But one thing's for sure, get it paid as soon as you can to make it all go away.  Only payments or death can make it go away.  Well there is another method that comes to mind called loan forgiveness, but that is typically for workers in certain industries and one must have made a certain number of payments (often several years) and the loan(s) cannot be in default/collections.

 

Get it paid as soon as possible.


Starting Score: EQ 593, TU 600, EX 612
Current Score: EQ 850, TU 850, EX 843
Goal Score: EQ 750, TU 750, EX 780


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Contributor

Re: I wonder. Paying owed collection make it reappear on CR?

Sorry maybe I didn't explain it right the first time around.

 

So I disputed the collection with Transunion, and they deleted it. So my question was....if I pay this back in full...do I risk them reporting it to the credit bureau as "paid in full" thus showing back up on my credit report. Right now it is not currently showing on my credit report. 

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Frequent Contributor

Re: I wonder. Paying owed collection make it reappear on CR?


@ohnomyfigo wrote:

Sorry maybe I didn't explain it right the first time around.

 

So I disputed the collection with Transunion, and they deleted it. So my question was....if I pay this back in full...do I risk them reporting it to the credit bureau as "paid in full" thus showing back up on my credit report. Right now it is not currently showing on my credit report. 


Hi ohnomyfigo,

 

Now is the perfect time to pay the collection- while it is not on you report.  Then once it is paid in full, that is the only way for it to be excluded from further reporting.  I would get it paid immediately before it comes back.


Starting Score: EQ 593, TU 600, EX 612
Current Score: EQ 850, TU 850, EX 843
Goal Score: EQ 750, TU 750, EX 780


Take the myFICO Fitness Challenge
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