Hello! Newbie to this group 
I have been in Loan Rehabilitation with my US Department of Education Loans since February and finally made my final 9th payment last week. I just received an update from Equifax that my score has dropped from 672 to 565. The notes say .... Updated Account Information US DEPARTMENT OF EDU+Remarks Removed From Account.
The accounts were showing as closed during the rehab process and now show as open. With a late payment of 120 days.
I was told that the rehabilitation process would actually help my credit and help me raise my score once I completed the program.
I am in the process of buying my first home and was waiting for this process to complete so I could get a FHA loan (which I couldn’t until after the program is completed).
The other credit bureaus have not reported the change yet so those scores have not dipped, and I more frightened for my FICO score because I know that is what lenders really look at.
I am so crushed. I thought this would help my score. What is the best course of action?
Thank you!
@Anonymous wrote:Hello! Newbie to this group
I have been in Loan Rehabilitation with my US Department of Education Loans since February and finally made my final 9th payment last week. I just received an update from Equifax that my score has dropped from 672 to 565. The notes say .... Updated Account Information US DEPARTMENT OF EDU+Remarks Removed From Account.
The accounts were showing as closed during the rehab process and now show as open. With a late payment of 120 days.
I was told that the rehabilitation process would actually help my credit and help me raise my score once I completed the program.
I am in the process of buying my first home and was waiting for this process to complete so I could get a FHA loan (which I couldn’t until after the program is completed).
The other credit bureaus have not reported the change yet so those scores have not dipped, and I more frightened for my FICO score because I know that is what lenders really look at.
I am so crushed. I thought this would help my score. What is the best course of action?
Thank you!
Was this EQ score your mortgage score or a vantage score or your FICO 8 score?
If it is your Vantage score they are wildly volatile and any changes from a closed account to open account will change the score greatly. Do you have a thin file? If so, even more. Regardless, I would ignore any Vantage score changes and do not get worked up if those change for the worst.
There was no guaruntee that the lates woupd be removed after completion of rehab, only that the CAs would be removed and defult status removed.
I know mine had a remark "affected by natural disaster" which excluded them from my scores. Not sure if this what happened to you, but having that remark removed would probably dip the score.
If you made the payment just last week, it sometimes takes a bit for all the changes to update: such as old CAs be removed and "new" old tradlines be opened or reopened.
I would be patient, the process isn't fast and don't dispute anything as that will likely just make it worse.
It is true you cannot have defaulted SLs for a mortgage app, so you had to do this, anyway.
Have you even been notified or found out who your new servicer is or if it is still with "us dept of ed"? Generally they only hold defaulted SLs.
Oh nooooooooo! I'm so sorry to hear this! I hope that it's a temporary glitch. Maybe the loan company can update the bureaus that your payment is current. From my understanding the student loan rehab program brings you current so you shouldn't be penalized for any prior past due payments. Hopefully it all works out for you with your house!
