Old charged off loans are back hurting my CR after consolidating with Navient

[nastalgia]

Hi all,

         I'm not so new here because I have been lurking the forums for a while now reading related topics to my very credit situations and I must say this is the most informative forum in the world. IF THERE'S A SIMILAR POST PLEASE CLOSE AND POINT ME IN THE DIRECTION!

So I have some student loans from 2007 after graduating college, long story short the recesion hit and decided to relocate to a different state for new employment. Wages were super low and I defaulted on all my loans for several months that turned into several years, I managed to get some in forberance and some into a rehabbed loans repayments that eventually didn't work beacuse I defaulted again. I think I had a total of 9 loans, Fedloans told me about 2 months ago that some of my loans can't be traced because the servicer lost the master promissory notes on file. Fast foward to late adulthood I've finally decided to tackle these loans because my income is great and wanted to fix my credit history as well as student loans. I rehabbed 4 loans again and Navient became my new servicer, 2 other loans attempted to garnish my wages but got it stopped early and sold to Nelnet but they canceled my application because the loan guarrantor had old data available still on file showing I'm being garnished when Nelnet attempted to buy it. It was resolved and Nevient got it this time so now all my loans are with Navient and scheduled to go into NEW GRAD repayment plan instead of IDR which lowers my payments significantly

   My credit has been worked on and looking good lately and finally happy to apply for a Mortage soon may be next year. Just 3 days ago my TU which has my 2nd highest score got hit with all 9 of my old loans as Charged off student loans and it went tumbling down the hill, knocked 60 pts off vantage and 41pts Fico. These charged off accounts on my TU are scheduled to be removed by Nov. 2020. Problem is I think its unfair as these were deleted off my credit files 3 years ago when I stared dipusting aged reports off my credit files as they were just over 7yrs old. I downloaded my loan records from NSLDS all showing Paid in full/resolved by consolidation

  So my question to TU over the phone was why did they come back on file as charged off and they really didn't have an answer for me. I have a feeling Dept of Education just decided to update my old files once the loans got bought by Navient. So are there any useful tips on how to approach Dept of Ed about possibly deleting them off my CR? will a Goodwill letter be useful? is there a letter or request I can send to TU to have them remove them? Thanks and I will take any useful advice I can get, I know there's a lot of brilliant resources on this forum if y'all can share some with me. Thanks y'all in advance.

[Anonymous]

Hi,
That's a lot to unpack and I can probably do a better job in the morning but I have a few thoughts and questions.
First, I think you might have a misunderstanding of the plans and how they work. This is not uncommon, and especially wasn't back then due to the lack of resources from the Dept of Education and servicers. When you were making low wages that was the perfect time to be on IDR. If needed you could actually have done a hardship forbearance for 3 - 1 year periods. I only say this because it's good information if you should unfortunately end up in the situation again.
I'm not familiar with any type of forbearance when you've defaulted; the entire balance becomes due.
I am also not familiar with any opportunity for you to rehab twice. Are you sure you don't mean consolidate at some point?
I'm unfamiliar with loans being sold. Typically the loans are owned by the Dept of Education. They are then assigned to a servicer, or a collection agency if you default. If you get out of default it is then assigned to a new servicer. If your wages are being garnished, I believe you would run into issues trying to consolidate.
The thing about federal loans is they never go away. They are never charged off, just in collections of you default. You may have gotten them removed from your report previously. More than likely it was because they were in default (for 7 years?). Another reason could be of the original servicer went out of business which would possibly result in the loss of the MPN. It's not needed for them to enforce the loan. The accounts are typically not removed 10 years after repayment. If you consolidated the defaults will remain on your account, for 4 years.
I'm unsure about the point loss. I could see where the utilization night result in a loss in points, surely the age of the accounts would help (unless you consolidated, which makes them brand new). It would also help if you didn't have any other installment loans.
Other than that you kind of have to count your blessings that it didn't show up sooner. You don't have a right to them being removed. You could try a dispute but if it were me I'd just leave it be since it's correct and try for an early Exclusion 6 months prior to them being deleted.
Hope this helps.

[calyx]

Could you clarify one point two points:
When you say that the rehabilitation didn't work out, does that mean you did not finish rehabilitating, or that you rehabilitated (did your 9 voluntary payments) and then defaulted again?  
You mention your NSLDS says it was "paid in full/resolved with consolidation" - is this the end result of your "rehab" or did you consolidate later?  (rehab and consolidation are two distinct processes).

It sounds like your loans were consolidated and not rehabbed -or- consolidation after you defaulted a second time.  With consolidation the default is not removed.  Unfortunately, since these are federal loans, they can stay on your record until the loans are paid in full.   They tend to come off of the CRAs after 7 years, when they don't really have to (take that as a blessing).

As far as your future actions - you could write a letter to Dept of Ed, but chances are, it will not change anything.  You could write a letter to TU to get it removed, which will probably result in a reinvestigation, Dept of Ed will say "yup, this is correct" and you'll have an annoying "consumer disputes this account" comment.    If this is *only* being reported to TU, I would actually hold off, and just request an Early Exclusion of the accounts in May of 2020 - TU is the easiest to get EEs with, and they will allow it 6 months before the fall off date (including Dept of Ed/fed student loans - I've done it)

If you defaulted twice (30+% of rehabbed student loan holders have done it, I'm one of them, so don't feel bad about it;   articles will tell you all about the flaws in the system), I can help you on the FICO end of that stick, as I've been there, done that and I'm happy to help.

[nastalgia]

Thanks guys for taking the time to respond to my post

Yes.... my loans went into default again after my first rehab ( 9 voluntary payments) 

The "Paid in full/consolidated" remark on my NLSDS report is as a result of my current loan consolidation with Navient and thats the remark on all my loans

 Yes its only on my TU reports and only reason I'm butt hurt about it is that the loans are 12 yrs old and as such felt like they shouldn't even reflect but I do get and value both y'alls point greatly. Thanks and I may talk to Dept of Ed about it this week and it that don't work I will file for an early EE with TU in may. Thanks again y'all 

[Anonymous]

One last thing, you mentioned thgraduate

Unfortunately, Federal loans have special rules, which can end benefitting you or hurting you. 12 years is a long time for private loans but no time for a federal loan. Same as you, if my old servicer has stepped up I'd be well on my way to forgiveness. It's good that you're in the right path now. But like Calyx said, it probably won't be removed. The fact that it dropped off the other two would make me recommend you might want to leave it alone. You could try to get the last one removed and only succeed in getting them added back to all 3. Is that something you want to risk?
You're lucky in that the lates were so long ago. You'll be able to resolve this soon. That's another reason to leave the older account. You'll have an account with no lates and will continue helping your score.
Just hang in there and you'll have some great scores. Good luck.

[nastalgia]

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@Anonymous wrote:
One last thing, you mentioned thgraduate

Unfortunately, Federal loans have special rules, which can end benefitting you or hurting you. 12 years is a long time for private loans but no time for a federal loan. Same as you, if my old servicer has stepped up I'd be well on my way to forgiveness. It's good that you're in the right path now. But like Calyx said, it probably won't be removed. The fact that it dropped off the other two would make me recommend you might want to leave it alone. You could try to get the last one removed and only succeed in getting them added back to all 3. Is that something you want to risk?
You're lucky in that the lates were so long ago. You'll be able to resolve this soon. That's another reason to leave the older account. You'll have an account with no lates and will continue helping your score.
Just hang in there and you'll have some great scores. Good luck.

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Thanks, I will leave them alone as next year is just around the corner.