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Fico score after rehabilitation

Regular Contributor

Fico score after rehabilitation

My rehabilitation for by school loan will be done on oct 16th.  I was wondering how much did everyone’s score increased after leaving the rehabilitation program and with a loan servicer.   My current score is between 675 and 690.   

Amex GoldAmex Hilton Aspire 3.1k
Valued Contributor

Re: Fico score after rehabilitation

@Sirano posted this:
"When you rehab the default TLs are removed. So say u defaulted in 2016- with rehab they will go back to that time and remove derogatory reporting. So rehab is much better in the long run. It has been 18 months since mine and my scores are up by over 150pts. Now they were low 550 or so but.... 700+ in 1 in 18 months most definitely worth it to me. Hope this helps"

Message 2 of 5
Regular Contributor

Re: Fico score after rehabilitation

The above poster isn't 100% accurate.  The lates have a CHANCE of being removed.  If you read through this forum frequently, you will notice that some folks do get the TLs removed & some do not.  I did a rehab & I was fortunate enough to have them removed.  Others not so much.  There doesn't seem to be a rhyme or reason for them being removed.


Hope for the best but plan for the worst.


What is happening is that the current TLs in delinquency get transferred to a new servicer.  New servicer = new account.  This will happen 100% of the time.  It will only occur after you complete the rehab & that transfer takes about 30 days.  The new servicer will not report the old account history because, well, it's a new account.  That also will happen 100% of the time.  The old TLs listed in delinquency will get showed as paid in full.  Again, this will happen.  


For me, on those TLs, Transunion is the only CRA currently reporting the account.  It is only reporting payments up until the DOFD.  For me that was 2011.  Some people still are showing the delinquency.  Some are not.  Some have all three CRAs still reporting.  This is the grey area.  Unfortunately, this grey area has some negative or positive impact in your score. 


The big point increase comes from the actual change in reporting.  You have X # of accounts reporting delinquency and basically within 45 days you have moved to a positive standing account. So rest assured your score will increase. It's just whether or not the history is removed or not.

My FICO Scores:
9/17: EQ - 542 / TU - 535 / EX - 506 // Mortgage: 553, 545, 486
10/ 17: EQ - 558 / TU - 563 / EX - 586 // Mortgage: 554, 568, 536
11/17: EQ - 630 / TU - 589 / EX - 614 // Mortgage: 606, 606, 572
12/17: EQ - 630 / TU - 624 / EX - 619 // Mortgage: 584, 612, 671

9/18: EQ - 676 / TU - 676 / EX - 643 // Mortgage: 652, 628, 606

Journey Milestones: Completed Federal Student Loan Rehab in Sept 2017. Settled First Premier Bank CC in August 2017. Constant uphill battle with Navient incorrect reporting on seven (7!) private student loans. No TLs listed in delinquency. Obsessively keeping 2 CC UTI @ 7-9% monthly.

End Goal: Pre-Approval for FHA Spring/Summer 2018 (COMPLETED)
New End Goal: 700+ Spring 2019
Message 3 of 5
Valued Contributor

Re: Fico score after rehabilitation

What I said is 100% accurate; I had nothing to contribute of a personal nature so I quoted another member's recent experience. It may not be relevant to everyone but I didn't say one person's experience would be everyone's. However, I've found through searching the forum extensively that most people who rehab either have their lates removed in the process or are successful in getting them removed themselves such as through dispute. It's not a guarantee, but I would say there is a good chance it will happen.

As far as scoring, I haven't seen anyone report a score drop. If good credit habits are maintained, I've seen a lot of people experience 50-100+ point gains in as soon as the first year.
Getting a new timeline 100% of the time... I don't think that's accurate as it could very well be returned to they old servicer. And I know for a fact that the 30 days to get assigned is incorrect. Right now there is a huge disconnect between what is supposed to happen with federal student loans and want actually does. Basically, there are a few people reporting being in limbo... Finished rehab but not picked up by a servicer for months if at all. In the same vein, this is likely why other people's loans are not reporting accurately to all three credit bureaus. Navient and FedLoan Servicing are known for this.

Regardless, rehab (often paired with Income-driven repayment plans) is a great option to get back in with the unique benefits of having a federal loan.

Message 4 of 5
Frequent Contributor

Re: Fico score after rehabilitation

I rehabbed 10+ federal student loan tradelines all at once, and I didn't see much of a score change at all after all of those tradelines were closed, and the new servicers picked them up.   Most of my previous servicers did not remove my lates.  As somebody else in this thread said, it's really a crap-shoot as far as removal of lates goes.  Anyway, I was in the mid 500s with all 3 bureaus at the time, and they actually went down a bit at first because of all of the new tradelines.  See here:


My score didn't really change for the better until I did the following:

1)   Consolidated all of my new loan tradelines into a federal Direct Loan, and then made several on-time payments on it.

2)   Applied for and got approved for a few credit cards, and made severa on-time payments carrying a zero balance the whole time. 


In short, it took about 6 months for me to see my score start to really go up after doing those things. 


It's a marathon, not a sprint. That's what I figured out the hard way.  Also, there is no one-size-fits-all way of discerning how rehab will impact credit scores.  


800+ for all 3 CRAs.

Took 4 years after rehabbing a bunch of defaulted student loans, but totally worth it.
Message 5 of 5
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