Any help would be greatly appreciated

[Anonymous]

So, here is my situation. I was an idiot, and have spent the last 12 months with a credit repair company. Thousands of dollars later, I am no closer to my credit repair goals than I was last year. Maybe I picked a terrible repair company, but its been a terrible waste of time and money. So, in 2020, I am dedicated to doing this myself, but if I am being honest, I have absolutely no idea what I am doing. 

All of the negatives on my report are from defaulted student loans. Up until November, I was barely making ends meet, and I was often worried about putting food on the table for the family, and making sure we had a place to call home. Student loans certainly werent a priority, but they are now. My scores aren't awful, but they range from the 640's-700. Here is what I am looking for help with.

- PHEAA sent me a copy of the promissory note, but there is a problem with that note. On the borrowers signiture line, it does not contain my signiture, instead, it contains a bunch of numbers that include my social security number and birthdate. I took a copy to my attorney to review, and he doesn't feel that this is a valid promissory note. When I looked on studentloan.gov, all of the loans are currently with PHEAA, but without a promissory note, my attorney is urging me to challenge the validity of PHEAA's ability to collect. This seems like a fight destined for a courtroom. I am willing to consolidate and begin paying my loans back, but my attorney called me an idiot for not even knowing who owns the loan, or if PHEAA even has the legal ability to collect. Any advice here?

- The killer for me is that PHEAA and AES aren't reported the defaulted loan once, they are reporting it 7-8 different times. I am not sure how that is even legal, but that is the extent of my negatives on the report.

- Is there anything I can do to continue to build positive credit? I have 20 months of consecutive, on-time Capital One secured CC payments, and 7 months of on-time payments with Self Lender, now Self. I don't want to apply for new credit, as I have looked at pre-qualifying stuff, and the offers just aren't there. I want to avoid another secured CC, but will go there if need be and the CC is decent. I keep my utilization to under 10% and pay off my card every month. 

Any advice for me would be amazing. Thank you all. 

[FireMedic1]

The student loan stuff we have 2 experts at. I'll ping them. Calling @Anonymous and @calyx . Any other negs outside of student loans presently? Then we can guide you in the right direction. Pass charge offs, defaults, repos, anything.Just need more info.

[silver_idle]

I assume the attorney said that indirectly as it would not really be professional for him to say that directly. Anyway, outside of the student loans (not familiar with the process), the best thing you can do currently is make sure to have on time payments, make sure to use your CC and pif each month, keep low utilization (30% is the spot you want to be below, but lower is better), and let things age. You may also want to list any other derogs you currently have so people can better assist you. This can include any CO, collections, lates (outside of the student loans), etc. A lot of them can be cleared up with a GW letter. If they are old enough, they might be able to get EE (Early Exclusion) with the CRA. And also, welcome to the forum.

[Anonymous]

Thank you for the response, and for including the experts on student loans. I have nothing else negative except AES who is reporting 7 accounts closed, but with several missed payments, and then PHEAA who has balances on the 7 accounts, and reporting them as in default. I have no collections, no repos, no judgements. I earn 65,000 a year, I currently rent, and my car is paid off. Car was in my Fathers name and credit. 

[FireMedic1]

Welcome@Anonymous 

The two guys I called on will help out. For now its <8.9% reporting on 1 card. The other $0 reporting. Have you tried Discover. Even if its secured it graduates with a CLI. @silver_idle its less than 28.9%. That 30% is all over the net and its really not accurate. Just a little adjustment.

[Anonymous]

I did try Discover, I was denied because of too many missed payments on the AES accounts. I was denied, and then I spoke to them to re-consider after. 

[FireMedic1]

Well theres Open Sky no HP secured to at least 2 cards reporting. Or even Merrick Bank has a pre-qual now I read. They double your credit limit with responsible use.

[Anonymous]

Oh, you are not alone on that credit repair thing. I know there are legit ones, but mine just took my money too and I was worse than when I started.

The good news is that you are in exactly the right place. The people here helped me raise my score and more importantly, understand it. Yours is actually pretty good and once you get a clean file it should shoot right up.

A few things. How long has it been since you were first delinquent?
Also, you should go to the National Student Loan Database, NSLDS, website. Here you can see all of your student loans, the balances, the status of them, the contact information for the collection agency if they're in default, etc. I do not know if all of your loans are federal and that makes a big difference. Outside of federal loans, I'm not really familiar with them. They also have different rules.

Approaching these as if they were federal loans, I would like to say that promissory note, no promissory note, it may not make a difference. I can tell you that my old servicer disappeared and left my current servicer with apparently nothing. So I honestly think the promissory note thing is not uncommon. You're in a better position. Yes, you could go to court and challenge it if they're in collection. But notice the lawyer told you you could and didn't actually want to help you do it. There was a very specific case that I saw on which this applied and the article I read pretty much discouraged anyone else from trying it. I can give you the link and you can read about it. But when your income, I don't see you bring able to order that it's impossible for you to pay off the loans over the course of 25 years (forgiveness). Disclaimer, I'm not a legal professional. 😬

Moving on, the first step is to get them out if default. Personally, I would stay away from getting any new credit until it's done. You'll get a nice score boost when it's done. Consolidation is quickest but generally used only when you're in a bind, such as needing it for a mortgage. This will cause the default to stay on your credit report (there are ones you can't see). Rehabbing is what I recommend and I've seen many people who were so much happier that they did. After 9 payments the loans will be returned to a servicer and you'll hi back to repaying it. There are Income-driven repayment plans at that point.
When you check the status of the line at the NSLDS website, it should list the collection agency they are with. Be sure to take note of the loans are in more than one place. Also when talking with the collection agency, make sure they include all the loans. Consolidation appeals to make because it groups the loans into one new loan with one payment but it's also a new tradeline, closing out those others that were actually aging nicely. If you want to group your payments together, you just need to ask your servicer later. No need to combine the loans.

The payments for rehab can be income-driven too. They can even take into account expenses if you fill out the form and submit the required documentation. If you have any questions during the process, the collection agencies answers night be correct... Or they might be biased. I've found them to be a little bit tricksters at times, not telling the complete answer. I would suggest asking the same questions here.
You must make the 9 separate payments on time. You can only rehab once. When your done, you get kicked up by a new servicer. The default goes away. The lates are not guaranteed to be erased. Sometimes they do get removed, or you can get them removed with a dispute but you don't have a right to removal.
With the a good credit history it shouldn't be hard to get above a 700 with the lates still on it.

There's a lot of information; any questions?
Good luck.

Update: No, it's perfectly normal to have that many loans listed. I have 8. It feels like it hurts you much more but the truth is that having so those aging tradelines will actually help in the long-run, especially when you start getting new tradelines.

[calyx]

Sabii has you covered pretty well with that response.

I would also urge you to rehab, rather than consolidate for a couple of reasons - 1) it will remove the defaults (although the lates may or may not also be removed, if they are not, you can still try to get them removed through the goodwill letters/saturation - consolidation will NOT remove the default)  2) You can always consolidate later.

AES/PHEAA were one of the servicers I dealt with with my loans, and while not the worst, they were not the best, either, so definitely keep notes of all of your verbal correspondance with them, and keep copies of anything they send you (don't throw them out).   If the NSLDS has AES/PHEAA listed as your servicer, then they're your servicer, and if you attempt to sue them/argue that they don't have authority, you will most likely lose (you're welcome to try, though I would not).

As Sabii mentioned - IBR/IDR (income based/driven repayments) are what you really want to get on, because how much you pay will be determined by how much you make, and can definitely make payback easier.  They generally use your tax return information, though you can also use worksheets and other proof of income.   IF something happens ( you lose pay/your job/etc), you can ask them to reevaluate the payment plan, so you might even endup with a payment of 0, which will keep your loans current.   If you want to pay extra, it will not harm your payment plan, either (they won't suddenly decide that your mandated payment should be higher).    In case of an emergency or life change, you can also ask for a forebearance/deferment to halt payments for a while if you need it, though using the IBR/IDR system is generally the best way to get them forgiven after a certain amount of time.

Don't be too hard on yourself - things might not have been good, and looking back, you might not have handled everything as great as you think - particularly with credit repair companies - but that's OK.   Many of us have been there, we can help you get back on track.

[Jannelo]

Like FireMedic suggested, Merrick Bank has a prequalify feature.   I was preapproved for $500, DYL after seven months, with an AF.  I didn't take it.  Then they took it away the next time I checked.  Then I received a mailer offering me $700 but with no AF.  I took it.  It will be doubled January 8 to $1,400.  My file wasn't great.  So you might have a chance at that.  They have been fine to deal with and helpful in my rebuild IMO.