Denied a morgage loan due to student loans

[Anonymous]

Hi,

So I was denied on a home loan with Fairway today due to my student loans.

From what I understand by reading my credit report, my 1 student loan is listed on my credit report 3 times.  First it's listed as Kentucky Higher Education Student Loan.  It's listed as a closed account.  $0 balance and listed as "pays account as agrees."

Then it's listed as Nelnet.  As a closed account.  Balance is listed as $0 across the board.  Equ and Trans both state 120 past due and Ex states "account transferred to another office."  The 3rd listing is KHEAA.  Listed as an open account.  Balance $4,039.  Showing as a collection account.  Is there anything at all I can do about this other than pay the full $4,039 at once?  I'm willing to give any other information if needed.  

[Anonymous]

First, I think the NSLDS Website can give you a fuller picture of what loan or loans you actually have. I suspect you only have the one, but it's better to know. It will also tell you the status of the loan, etc.
You mentioned you want to get a mortgage. What you do will depend on how soon. You could pay off the collection account but I'm not sure if this will get the collections account removed. I'm also not sure of it matters that it stays or it's paid in full in terms of your credit score.
If you had time, you could rehab and after 9-10 payments it would go back to a servicer. This would remove the default. It might also remove the lates payments. This would help your score. You could also keep it a bit longer, pay it off below 8.9% (?) For maximum point gain if you needed the installment loan more than you needed to pay it off right away.
You could also consolidate for a quicker but that will give you a brand new loan, and wouldn't remove the default or the lates. All depends on how much time you want to spend on it.

[Anonymous]

I appreciate your response.  Can you do rehab more than once?  I did rehab about 5 years ago but then got behind again smh.  

[calyx]

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@Anonymous wrote:

I appreciate your response.  Can you do rehab more than once?  I did rehab about 5 years ago but then got behind again smh.  

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Hi Kimboo,

You can only rehab once, however, I was allowed to do a direct consolidation through US Dept of Ed.   It did not remove the default or late payments, but the loans/Collections were marked as paid and I had a new tradeline (plus a big FICO point boost).  

[Anonymous]

Oh wow, do you have the contact information to do that type of consolidation?  I will definently look into doing that.