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Defaulted student loans

Defaulted student loans

Wasn't sure where to ask. I had to leave school back in 2015 and I defaulted on my federal student loans then. As of today they are still reporting on my credit files and also late payments. There's 6 total when it should only be three. They have different default dates. 3 are 2015 and three are 2018. First should these still be reporting since it's been over seven years? I know I need to pay them but it's hard when I know it wouldn't improve my credit and I know they should already have stopped reporting. Where can I go for help? I've already tried disputing them myself with no luck. These are the only collections/defaults I have and I'm trying to purchase my first home. 

Message 1 of 9
8 REPLIES 8
dragontears
Valued Contributor

Re: Defaulted student loans


@davidsmithsc712 wrote:

Wasn't sure where to ask. I had to leave school back in 2015 and I defaulted on my federal student loans then. As of today they are still reporting on my credit files and also late payments. There's 6 total when it should only be three. They have different default dates. 3 are 2015 and three are 2018. First should these still be reporting since it's been over seven years? I know I need to pay them but it's hard when I know it wouldn't improve my credit and I know they should already have stopped reporting. Where can I go for help? I've already tried disputing them myself with no luck. These are the only collections/defaults I have and I'm trying to purchase my first home. 


Some federal student loans have extended reporting ability as long as they are unpaid. 

Are you eligible for rehab? That would remove the "default" status (which is likely a requirement if the mortgage you are trying for is government backed i.e. FHA, USDA, etc.)

Scores hover around 800
Haven't been AZEO in over a year
Rome was not built in a day, neither is a good credit profile
Message 2 of 9
LaHossBoss
Senior Contributor

Re: Defaulted student loans


@davidsmithsc712 wrote:

Wasn't sure where to ask. I had to leave school back in 2015 and I defaulted on my federal student loans then. As of today they are still reporting on my credit files and also late payments. There's 6 total when it should only be three. They have different default dates. 3 are 2015 and three are 2018. First should these still be reporting since it's been over seven years? I know I need to pay them but it's hard when I know it wouldn't improve my credit and I know they should already have stopped reporting. Where can I go for help? I've already tried disputing them myself with no luck. These are the only collections/defaults I have and I'm trying to purchase my first home. 


I believe straight up you cannot get a mortgage if you have defaulted federal loans. Also Fed Loans never disappear, even if they come off your credit reports.

 

If you want to purchase a home, put the SLs through rehab - do not simply pay them off - paying them or even the offer of consolidation will *not* remove the defaulted SLs or the default marks. Even if you have the money to pay them, wait until the entire rehab process is complete and fully transferred to a new lender and reporting on your credit reports to pay them off or you may stop the process from completing properly (has happened to others recently) The only way to do that is to rehab them. Now you say 2015 they defaulted, so it has not been 7 years. That would make it 2022 when they will age off.

 

Completing rehab absolutely should help your scores and definitely your credit profile.

 

Right now rehab has $0 payments thru 9/2021, so if you sign up now, you will only be required to make 3 actual payments. I would take this very rare opportunity.

 

It is also correct that there are 6 SLs on your credit reports.

 

3 are the original student loans and the other 3 are the corresponding collection accounts. Likely one set is FedLoan and the other set is the US Dept of ED.

 

When (if) you complete rehab, the 3 from the US Dept of ED will be removed. The other 3 may remain, with the lates intact. Some get lucky and they are removed. Regardless, lates should be aging off over the next year or so, depending on exactly when they happened. Basically when each hit 7 years old.

 

I would pull all 3 credit reports from annual credit report for free (can do this weekly thru 4/2022 - no scores). Each report will spell out when the entire account will age off. TU will list "estimated date of removal". EX will list "on record until" (which will be correct even though it will be different than EQ and TU). EQ will list "date of first delinquency" (*not* the also listed "date major delinquency first reported"). Add 7 years to that date and the accounts should age off the month prior to that date.

 

Good luck!




Starting Score: 2•20 | EQ 550 | TU 498 | EX 505
Current Score: 7•21 | EQ [F8 645] [F9 651] [EQ5 684] [VS3 630] | TU [F8 717] [F9 692] [TU4 723] [VS3 643] | EX [F8 714] [F9 675] [EX2 681] [VS3 674]
Goal Score: 670 [X] TU [X] EX

Take the myFICO Fitness Challenge

SO Starting Score: 2•20 | EQ 502 | TU 484 | EX 521
SO Current Score: 7•21 | EQ [F8 670] [F9 622] [EQ5 706] [VS3 639] | TU [F8 676] [F9 673] [TU4 652] [VS3 620] [VS4 598] | EX [F8 707] [F9 711] [EX2 680] [VS3 656]
Goal Score: 670 [X] TU [X] EX




Message 3 of 9

Re: Defaulted student loans

Thank you for the information. How do I start the rehab process? 

Message 4 of 9

Re: Defaulted student loans

Also the date of default is 2013 not 2015. Was a typo on my part. As far as scores it is in the mid 600s. Is it true I can't even get a conventional loan until the student loans are taken care of? 

Message 5 of 9
LaHossBoss
Senior Contributor

Re: Defaulted student loans


@davidsmithsc712 wrote:

Also the date of default is 2013 not 2015. Was a typo on my part. As far as scores it is in the mid 600s. Is it true I can't even get a conventional loan until the student loans are taken care of? 


Did you pull all 3 credit reports from annual credit report? That will tell you DoFD and age off dates.

 

If you ever made a payment or the gave you deferment or forebearance, that resets the DoFD.

 

You do need to rehab your loans to get a mortgage. Even if they are not in your credit reports, they can be found since they are federal.

 

If you got to the NSLD website, that will tell you all the info on all your loans and who to contact to stadt the rehab process. Do not get talked into consolidation or paying them off. That will not remove the defaults from your credit reports. If they have already aged off or are set to soon, then you can simply pay them off, since there will be no defaults any longer on your credit reports.

 

You meed to start with annual credit report and NSLD.

 

 




Starting Score: 2•20 | EQ 550 | TU 498 | EX 505
Current Score: 7•21 | EQ [F8 645] [F9 651] [EQ5 684] [VS3 630] | TU [F8 717] [F9 692] [TU4 723] [VS3 643] | EX [F8 714] [F9 675] [EX2 681] [VS3 674]
Goal Score: 670 [X] TU [X] EX

Take the myFICO Fitness Challenge

SO Starting Score: 2•20 | EQ 502 | TU 484 | EX 521
SO Current Score: 7•21 | EQ [F8 670] [F9 622] [EQ5 706] [VS3 639] | TU [F8 676] [F9 673] [TU4 652] [VS3 620] [VS4 598] | EX [F8 707] [F9 711] [EX2 680] [VS3 656]
Goal Score: 670 [X] TU [X] EX




Message 6 of 9
Rottweilerlvr
Valued Member

Re: Defaulted student loans

 

 

I would pull all 3 credit reports from annual credit report for free (can do this weekly thru 4/2022 - no scores). Each report will spell out when the entire account will age off. TU will list "estimated date of removal". EX will list "on record until" (which will be correct even though it will be different than EQ and TU). EQ will list "date of first delinquency" (*not* the also listed "date major delinquency first reported"). Add 7 years to that date and the accounts should age off the month prior to that date.

 

Good luck!


Where do you see this? I'm currently paying the monthly premier subscription with MyFICO and don't see any estimated removal dates with each agency? I have paid defaulted student loans. 

Message 7 of 9
LaHossBoss
Senior Contributor

Re: Defaulted student loans


@Rottweilerlvr wrote:

 

 

I would pull all 3 credit reports from annual credit report for free (can do this weekly thru 4/2022 - no scores). Each report will spell out when the entire account will age off. TU will list "estimated date of removal". EX will list "on record until" (which will be correct even though it will be different than EQ and TU). EQ will list "date of first delinquency" (*not* the also listed "date major delinquency first reported"). Add 7 years to that date and the accounts should age off the month prior to that date.

 

Good luck!


Where do you see this? I'm currently paying the monthly premier subscription with MyFICO and don't see any estimated removal dates with each agency? I have paid defaulted student loans. 


You need to go to annual credit report. *not* myfico, as I outlined above.




Starting Score: 2•20 | EQ 550 | TU 498 | EX 505
Current Score: 7•21 | EQ [F8 645] [F9 651] [EQ5 684] [VS3 630] | TU [F8 717] [F9 692] [TU4 723] [VS3 643] | EX [F8 714] [F9 675] [EX2 681] [VS3 674]
Goal Score: 670 [X] TU [X] EX

Take the myFICO Fitness Challenge

SO Starting Score: 2•20 | EQ 502 | TU 484 | EX 521
SO Current Score: 7•21 | EQ [F8 670] [F9 622] [EQ5 706] [VS3 639] | TU [F8 676] [F9 673] [TU4 652] [VS3 620] [VS4 598] | EX [F8 707] [F9 711] [EX2 680] [VS3 656]
Goal Score: 670 [X] TU [X] EX




Message 8 of 9
RobertEG
Legendary Contributor

Re: Defaulted student loans

While the FCRA sets normal exclusion for monthly deinquencies at 7 years and charge-offs at 7 years plus 180 days, those exclusion provisions are not absolute.

When the Higher Education Act was enacted, it included provisons that exempt those FCRA exclusion provisions for some (but not all) federal student loans until the loan has been repaid, and also mandated the reporting of delinquencies on those loans.  

 

If your loan is of a type covered under the exemption provisions of the HIgher Education Act, then reporting is mandatory, and the normal exclusion periods do not apply until the loan is repaid.

Message 9 of 9
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