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Completed Rehab - Worthless Experience

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Valued Member

Completed Rehab - Worthless Experience

I completed my loan rehab for my two student loans and the remaining balance was transfer to my FedLoan Servicing on July 17, the same company been on my credit report for a while (I believe the entire time, or least the past 1.5 years while I cared about my credit). Anyways, I paid both accounts off in full on August 18. When my account finally updated, it still says FedLoan Servicing paid account as agreed and/or transferred to another office with $0 balance or blank. Does not show any of the payments I made while under rehab and the two accounts still show up as negative.

 

So I disputed the accounts last month with supporting documents showing successful completion of rehab program and pay in full letters all showing the accounts was never transferred out, but remained with FedLoan Serving. All 3 credit reporting agencies sided with FedLoan Serving, in fact they updated 120+ days late or 180 days delinquent.

 

Not sure what else to do with these accounts, only negatives still on my account and holding my scores down; still getting me the occasional denial letters. I am wanting to buy some land in the first or second quarter of next year to build a hanger/condo on and trying to get my scores ready by then.

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Valued Contributor

Re: Successfully Completed Rehab And Scores Will Not Update


@SH556 wrote:

I completed my loan rehab for my two student loans and the remaining balance was transfer to my FedLoan Servicing on July 17, the same company been on my credit report for a while (I believe the entire time, or least the past 1.5 years while I cared about my credit). Anyways, I paid both accounts off in full on August 18. When my account finally updated, it still says FedLoan Servicing paid account as agreed and/or transferred to another office with $0 balance or blank. Does not show any of the payments I made while under rehab and the two accounts still show up as negative.

 

So I disputed the accounts last month with supporting documents showing successful completion of rehab program and pay in full letters all showing the accounts was never transferred out, but remained with FedLoan Serving. All 3 credit reporting agencies sided with FedLoan Serving, in fact they updated 120+ days late or 180 days delinquent.

 

Not sure what else to do with these accounts, only negatives still on my account and holding my scores down; still getting me the occasional denial letters. I am wanting to buy some land in the first or second quarter of next year to build a hanger/condo on and trying to get my scores ready by then.


You do not get credit for the rehab payments on your CRs.

 

There is also zero guarantee that the OCs will remove the lates from when you defaulted and only the CAs would be deleted.

 

They also really dislike when you dispute lates, and as you have seen, they will only place on additional lates.




Starting Score: 2•20 | EQ 550 | TU 498 | EX 505
Current Score: 11•20 | EQ [F8 615] [F9 653] [EQ5 645] [VS3 657] | TU [F8 600] [F9 552] [TU4 563] [VS3 639] | EX [F8 587] [F9 573] [EX2 614] [VS3 631]
Goal Score: 680


Take the myFICO Fitness Challenge

SO Starting Score: 2•20 | EQ 502 | TU 484 | EX 521
SO Current Score: 11•20 | EQ [F8 602] [F9 540] [EQ5 599] [VS3 534] | TU [F8 631] [F9 587] [TU4 572] [VS3 640] [VS4 634] | EX [F8 651] [F9 614] [EX2 630] [VS3 657]
Goal Score: 680


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Message 2 of 8
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Re: Successfully Completed Rehab And Scores Will Not Update

I never disputed the lates. Only the fact it states transferred out when it hasn't. When reviewing my credit report, it appears as if they sold it to collections agency or something when they still remain with Fed Loan Servicing and are paid in full. Really it seems like the entire rehab process was pointless for me, I would have been better off paying it in full at the end of last year rather then starting rehab.

Message 3 of 8
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Re: Successfully Completed Rehab And Scores Will Not Update


@SH556 wrote:

I never disputed the lates. Only the fact it states transferred out when it hasn't. When reviewing my credit report, it appears as if they sold it to collections agency or something when they still remain with Fed Loan Servicing and are paid in full. Really it seems like the entire rehab process was pointless for me, I would have been better off paying it in full at the end of last year rather then starting rehab.


Did you wait to get transferred to the new servicer and let all the updates happen  with your CRs before you paid off the SLs? Or did you just pay them off during rehab?

 

If you paid them off while still technically in rehab and not with a new servicer or fully reinstated with the old one, it probably worked against you.

 

The US Dept of Ed generally holds the defaulted SLs and not the loans that are good standing, in my experience.




Starting Score: 2•20 | EQ 550 | TU 498 | EX 505
Current Score: 11•20 | EQ [F8 615] [F9 653] [EQ5 645] [VS3 657] | TU [F8 600] [F9 552] [TU4 563] [VS3 639] | EX [F8 587] [F9 573] [EX2 614] [VS3 631]
Goal Score: 680


Take the myFICO Fitness Challenge

SO Starting Score: 2•20 | EQ 502 | TU 484 | EX 521
SO Current Score: 11•20 | EQ [F8 602] [F9 540] [EQ5 599] [VS3 534] | TU [F8 631] [F9 587] [TU4 572] [VS3 640] [VS4 634] | EX [F8 651] [F9 614] [EX2 630] [VS3 657]
Goal Score: 680


Take the myFICO Fitness Challenge



Message 4 of 8
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Valued Member

Re: Successfully Completed Rehab And Scores Will Not Update

I received a letter stating my loans where transferred to Fed Loan Servicing after I completed 9 months of rehab on July 17. I thought it was odd, because it has been with them and technically never transferred. I paid it off completely on August 18, about a month after I received the rehab completion letter.

 

The only thing that disappeared off my credit report was US Dept of Ed.

Message 5 of 8
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Regular Contributor

Re: Successfully Completed Rehab And Scores Will Not Update

@SH556 Have you seen any score movement? I would have expected your scores to go up when the US Dept of ED accounts were removed from your CR, especially if student loans are your only derog. It seems like the addition of those lates, triggered by the dispute, might have blocked the gains you were seeking. 

 

I agree with @LaHossBoss, rehab only guarantees removal of the US Dept of ED collections accounts, not your original Fedloan Servicing accounts. Some get lucky and have those removed too, but it is not the norm. For example, mine were removed from EX, but not TU or EQ. 

 

I've also seen some people's loans get "transferred" back to the original servicer. Just a quirky thing that seems to happen. 

 

I'm sorry that the process wasn't what you were expecting and I hope that you're able to move forward with your real estate purchase next year. 




Message 6 of 8
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Re: Successfully Completed Rehab And Scores Will Not Update

My scores didn't improve, stayed about the same. High 600's or low 700's depending on the model (typically what DCU and Apple Card uses). Actually just looking back at my old reports side by side with current. It appears they always had 120+ or 180 day lates; I thought it just had multiple 30+ obviously (so that never changed). The only thing I noticed different after I disputed and should work in my favor, is the date of first delinquency is now 07/2014 vs 07/2018 and is now accurate. So should drop off next year if I'm correct? If so that window could work in my favor as I am looking to pay cash for the land and look into finance options for construction hopefully later in the year.

 

But shouldn't I get credit for the last payment I made directly to Fed Loan Servicing to pay off the loans? But they do say, Pays account as agreed, Paid or paying as agreed or Account transferred to another office (all list as closed with $0 balance or blank, the one that says transfered).

Message 7 of 8
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Re: Successfully Completed Rehab And Scores Will Not Update


@SH556 wrote:

My scores didn't improve, stayed about the same. High 600's or low 700's depending on the model (typically what DCU and Apple Card uses). Actually just looking back at my old reports side by side with current. It appears they always had 120+ or 180 day lates; I thought it just had multiple 30+ obviously (so that never changed). The only thing I noticed different after I disputed and should work in my favor, is the date of first delinquency is now 07/2014 vs 07/2018 and is now accurate. So should drop off next year if I'm correct? If so that window could work in my favor as I am looking to pay cash for the land and look into finance options for construction hopefully later in the year.

 

But shouldn't I get credit for the last payment I made directly to Fed Loan Servicing to pay off the loans? But they do say, Pays account as agreed, Paid or paying as agreed or Account transferred to another office (all list as closed with $0 balance or blank, the one that says transfered).


I would take it as a blessing in disguise.

 

At this point you have a DoFD of 7/2014.

 

If you get "credit" for the last payment made, that means you will have brought the account current and no longer have a DoFD and the TL(s) will remain on your CRs for 10 years and the lates will fall off individually 1 at a time for TU and EQ. EX will drop strings of lates, but the account will remain (positive at that point).

 

So that is a decision you need to make:

 

Let the accounts age off with all the derogs in less than a year (or earlier with TU and EX via EE - early exclusion).

 

Or

 

Get credit for the final payment, bring the account(s) current and allow the lates to trickle off and then the now positive TLs will remain for 10 years.




Starting Score: 2•20 | EQ 550 | TU 498 | EX 505
Current Score: 11•20 | EQ [F8 615] [F9 653] [EQ5 645] [VS3 657] | TU [F8 600] [F9 552] [TU4 563] [VS3 639] | EX [F8 587] [F9 573] [EX2 614] [VS3 631]
Goal Score: 680


Take the myFICO Fitness Challenge

SO Starting Score: 2•20 | EQ 502 | TU 484 | EX 521
SO Current Score: 11•20 | EQ [F8 602] [F9 540] [EQ5 599] [VS3 534] | TU [F8 631] [F9 587] [TU4 572] [VS3 640] [VS4 634] | EX [F8 651] [F9 614] [EX2 630] [VS3 657]
Goal Score: 680


Take the myFICO Fitness Challenge



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