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Original trade lines for Student Loans not updated after Consolidation?

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Regular Contributor

Original trade lines for Student Loans not updated after Consolidation?

So I am trying to clean up my CRs after Chapter 7 DC last October and I keep looking at these derogatory lates (yes 16 of them) on my original student loans. When I consolidated these loans, shouldn't the original ones have updated as paid? They are closed, but they say transferred to another lender, and 180, 120 late. They are NOT marked as paid, or pays as agreed.
Is this incorrect?
I was under the impression that these trade lines would be updated and/or removed.
My questions:
Are these reporting incorrectly?
Who do I contact if so? The original loan servicer? Or CRA's or both?
These are not due to fall off until 2021-2023 and they are killing my scores.
On a side note: I have been paying on the consolidation now for 4 months, no lates so I would have though that things would be updated by now??
Thoughts?
Chapter 7 DC 10/23/18
Starting FICO 8 11/22/18

Current FICO 8 11/13/19

GOAL 680 by 12/19
Current FICO 9 10/28/19

Student loans and car payments reporting positive

8 REPLIES 8
Valued Contributor

Re: Original trade lines for Student Loans not updated after Consolidation?

I'm not sure about the status they will be updated to, however they will not be removed. Unfortunately the effect of any late 90 days or more does not lessen over time so you will not gain those points back until the lates fall off. It is a huge point loss. You also mentioned bankruptcy, do you have any credit cards because if you don't, that will affect your score too.
You could always try to dispute the status with the CRA if it turns out they should be showing up as closed. I'm not sure what improvement that would make on your score though. It might just take time.



Message 2 of 9
Regular Contributor

Re: Original trade lines for Student Loans not updated after Consolidation?

Thanks Sabii, and yes, I have 3 credit cards, the consolidated student loans, and a car payment all reporting positive now.

I'm just unsure if the old student loans are reporting correctly. They are not even marked as paid, just closed and transferred to another lender.
Chapter 7 DC 10/23/18
Starting FICO 8 11/22/18

Current FICO 8 11/13/19

GOAL 680 by 12/19
Current FICO 9 10/28/19

Student loans and car payments reporting positive

Message 3 of 9
Highlighted
Valued Contributor

Re: Original trade lines for Student Loans not updated after Consolidation?

There are a few other Questions listed here by members who say they have consolidated loans. You might ask them how their loans are showing up (paid vs just closed).
Otherwise, sounds like you're doing all you can to recover and if you have to wait until they fall off you should get an excellent score boost.
If they are federal loans, were you able to find a payment plan that fits your needs? I can give you some tips on this if you need any.



Message 4 of 9
Frequent Contributor

Re: Original trade lines for Student Loans not updated after Consolidation?

After rehabbing my 18 loans, the original tradelines got closed and the balances were transferred Sallie Mae.   When I consolidated those new tradlines into a Direct Loan, the old ones showed up as "Paid, Closed/Never late" under account status. I'm looking at my official Experian CR that I downloaded a few weeks ago.  Be careful looking at CreditKarma and such.  They way they show notations doesn't always match official CR's. 

 

The tradelines that I originally rehabbed have since fallen off my credit report, and I don't recall what the notation was for those. 

 

Maybe the standing of the account determines the notation upon consolidation?  I'm not sure. 

 

 

 

800+ for all 3 CRAs.

Took 4 years after rehabbing a bunch of defaulted student loans, but totally worth it.
Message 5 of 9
Regular Contributor

Re: Original trade lines for Student Loans not updated after Consolidation?

I sent an email to Great Lakes (who I completed the rehab with) to see why they are not reporting paid and not late (which is what it should say after rehab). I consolidated with Nelnet, so I will be contacting them as well about the old trade lines. I guess I will just wait and see what happens with them, and if nothing, I will file disputes with the CRA's.
Chapter 7 DC 10/23/18
Starting FICO 8 11/22/18

Current FICO 8 11/13/19

GOAL 680 by 12/19
Current FICO 9 10/28/19

Student loans and car payments reporting positive

Message 6 of 9
Valued Contributor

Re: Original trade lines for Student Loans not updated after Consolidation?

Okay, I'm confused. You defaulted on them, right?
Did you consolidate the loans, from default?
Or did you rehab the loans to get out of default, then consolidated them?
In either case, if those lates were legitimately aquired before you did anything, then no they will likely not be removed. Consolidation does not remove the lates, and rehabbing sometimes does. However, you do not have the right to have the lates removed through either process; rehabbing will remove the default though. (From Dept of Education: Rehab vs Consolidation). Sometimes the servicer will remove them and sometimes people can get them removed after a rehab through CRA disputes, but technically disputing is only for inaccurate information. In addition, the federal government requires that the servicer report accurately so you cannot get a Goodwill adjustment.
If the lates were accurate but recent, you could always ask the original servicer on those loans if you can get a retroactive forbearance. Some people they just grant it, some people they give a hard time to so you have to be persistent. If you get the retroactive forbearance, your lates will likely not be removed. Instead do a dispute with the CRA, including the forbearance letter. They should be removed then.
If the lates are inaccurate, you can dispute them. CRAs, then student loan Ombudsman, then if none of that works, Consumer Financial Protection Bureau (CFPB) Complaint.
Student Loan servicers do a lot of things that go against regulation. However, the latest gov report released about them has decided 1) they do a lot of things that hurt the borrowers and 2) we're not going to hold then accountable for it. In the end the best you can do is use the resources laid out to resolve disputes because nothing short of a lawsuit is going to stop them and from past lawsuits, not even that. Trust me, you're not alone in being frustrated by servicers.
Good luck.



Message 7 of 9
Regular Contributor

Re: Original trade lines for Student Loans not updated after Consolidation?

The loans went into default, they switched servicers, issued a wage garnishment that I paid on for a year (no loan servicer shows these payments so I have no idea where the money went), entered into a rehab with Great Lakes, completed rehab with them (just got their statement and these payments do not show on my statements but they were paid through my bank so I have proof). Great Lakes has updated their accounts to show positive, paid, never late. The problems are that during the time periods of 2016-2017 (during the garnishment), and 2017-2018 during the rehab, there are lates on my credit report from the Dept of Education for these same loans that I was paying on. Does that make any sense?
I am in the process of getting the address info to where the garnishment money was sent to (I have a copy of the garnishment but it just shows DOE). And, I am waiting for a call back from Great Lakes to find out why the rehab payments are not listed on my statements.
I may just hire someone to sort this out. Its driving me nuts.
Chapter 7 DC 10/23/18
Starting FICO 8 11/22/18

Current FICO 8 11/13/19

GOAL 680 by 12/19
Current FICO 9 10/28/19

Student loans and car payments reporting positive

Message 8 of 9
Valued Contributor

Re: Original trade lines for Student Loans not updated after Consolidation?

I'm not 100% on this but from my experience with others this is what I think happened.
Your loans went into default (then went back to Dept of Education? Not sure what happens in between) and gets sent to a collection agency. It can bounce around. The collection agency issues a wage garnishment and you rehabbed. At that point it's still with the collection agency. You finish your rehab, your loan gets picked up by a servicer again. If you want statements about your rehab you'll have to contact the collection agency. The wage garnishment should have been applied to your total balance owed, minus whatever fees they take out. I think the same hppens of your rehab payments though it might not be enough to cover your monthly interest, so keep that in mind.
Having the statement with your wage garnishment and rehab payments would be nice because it will show the exact dates you paid but it might help if you could just get a letter from the servicer acknowledging that you finished your rehab.
I've never heard of people getting lates while rehabbing (altjoyiy doesn't surprise me with these servicers) ande the default is supposed to be removed from your report with rehabbing (Idk exactly how but I'm pretty sure those lates should be included).
I know it's frustrating and time-consuming but really, I think you will have positive results. You've got your paperwork, and submitting it to the CRAs with your dispute doesn't work you've got the Ombudsman (people have mixed result, meh), and CFPB if that doesn't work. I've always had great luck with CFPB when the CRA and servicers keep blame-shifting.
I would caution who you hire to take care of this. Student loans bring a lot of scammers. If you need further advice or help, Student Loan Hero website offers free help. After you submit the disputes, the hardest part will just be waiting.
If I find something else out, I'll let you know. 🙂 Good luck.



Message 9 of 9
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