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Rehabbed Student Loans - FICO impact?

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Regular Contributor

Rehabbed Student Loans - FICO impact?

Hey folks

 

 My defaulted student loans for over $225k ($150 is interest + penalties I think) will be 9-month rehabbed next month. I called them (Coast Professional) to confirm this a few weeks ago.  They fell off my credit report about 9 years ago. The last loan was issued in 2004. There are about 30 different loans. 

- will all of those loans appear as new trade lines?

- Will the incredible astronomical sums owed capsize my rebuilding FICO scores?

- will all the lates disappear given how old these loans are ( >7 years)?

 

 Just to reiterate these are rehabbed not consolidated 

 

thanks in advance!


Starting FICO 8 Scores 7/19

Current Scores updated regularly

HPs

REVOLVING LINES:

SOCK DRAWER:


INSTALLMENTS:
2 more payments!!
Student Loans back online (27@over $200k)





BK Drops: 2029
2020 Goals:
• [X] $10k revolving CL by 2021
• Apple Card (too sexy not to have) by 2021
• [X] Just one more cash back rewards card by 2021
• [X] Student Loans (27, yes, 27 of them) out of rehab and default by 6/2020
• [ ] FICO 670 by end of 2020: [ ]EX [ ]TU [ X ]EQ
• [X] PC Cap1 to QS 5/2020 - 100 days after opening; credit steps done 8/2020
• [X] PC Discover—to DiscIt 5% 3/2020
Message 1 of 5
4 REPLIES 4
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Regular Contributor

Re: Rehabbed Student Loans - FICO impact?

So I've tried to mine the forum for some of the info, let's see if I can answer my own questions


@Back2Reality wrote:

Hey folks

 

 My defaulted student loans for over $225k ($150 is interest + penalties I think) will be 9-month rehabbed next month. I called them (Coast Professional) to confirm this a few weeks ago.  They fell off my credit report about 9 years ago. The last loan was issued in 2004. There are about 30 different loans. 

- will all of those loans appear as new trade lines?

Yes, each loan will show up as a new trade line. But I am not sure about this.

 

- Will the incredible astronomical sums owed capsize my rebuilding FICO scores?

Not necessarily. Loan tradelines are treated differently than credit card debts, so utilization doesn't have the same impact

 

- will all the lates disappear given how old these loans are ( >7 years)?

The consensus seems to be that any lates/negatives that are older than 7 years will not appear with these new loans

 Just to reiterate these are rehabbed not consolidated 

 

thanks in advance!


Did I get these right? Thanks for any input


Starting FICO 8 Scores 7/19

Current Scores updated regularly

HPs

REVOLVING LINES:

SOCK DRAWER:


INSTALLMENTS:
2 more payments!!
Student Loans back online (27@over $200k)





BK Drops: 2029
2020 Goals:
• [X] $10k revolving CL by 2021
• Apple Card (too sexy not to have) by 2021
• [X] Just one more cash back rewards card by 2021
• [X] Student Loans (27, yes, 27 of them) out of rehab and default by 6/2020
• [ ] FICO 670 by end of 2020: [ ]EX [ ]TU [ X ]EQ
• [X] PC Cap1 to QS 5/2020 - 100 days after opening; credit steps done 8/2020
• [X] PC Discover—to DiscIt 5% 3/2020
Message 2 of 5
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Valued Contributor

Re: Rehabbed Student Loans - FICO impact?

Perfect! *Writes A+ at the top* 😁

 

1) yes and no. They will show up again with a new servicer and look like be tradelines, but they will be backdated. So that's great because they're usually one of the oldest tradelines. 

 

2) It doesn't really matter that much. It counts for very little of your score. I think the consensus was like 20 points penalty? All I know is that I'm over 100% and it's not hurting me much. The other thing to keep in mind is once it's over 100% you're not going to lose any additional points. 

 

3) correct. I think I read somewhere that although the tradeline may or may not get removed (if the loan is still in repayment) the lates should be removed. 

 

Glad you rehabbed and that everything will work out well for you. Check out the plans, especially IDR. Also keep on top of the first payments as servicers are often not very helpful. And also keep in mind they won't report to the credit bureaus until 90+ days late so you have to watch your account. 

Congrats and good luck.




Message 3 of 5
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Regular Contributor

Re: Rehabbed Student Loans - FICO impact?


@Sabii wrote:

Perfect! *Writes A+ at the top* 😁

 

1) yes and no. They will show up again with a new servicer and look like be tradelines, but they will be backdated. So that's great because they're usually one of the oldest tradelines. 

 

2) It doesn't really matter that much. It counts for very little of your score. I think the consensus was like 20 points penalty? All I know is that I'm over 100% and it's not hurting me much. The other thing to keep in mind is once it's over 100% you're not going to lose any additional points. 

 

3) correct. I think I read somewhere that although the tradeline may or may not get removed (if the loan is still in repayment) the lates should be removed. 

 

Glad you rehabbed and that everything will work out well for you. Check out the plans, especially IDR. Also keep on top of the first payments as servicers are often not very helpful. And also keep in mind they won't report to the credit bureaus until 90+ days late so you have to watch your account. 

Congrats and good luck.


Thank you! This is awesome advice 


Starting FICO 8 Scores 7/19

Current Scores updated regularly

HPs

REVOLVING LINES:

SOCK DRAWER:


INSTALLMENTS:
2 more payments!!
Student Loans back online (27@over $200k)





BK Drops: 2029
2020 Goals:
• [X] $10k revolving CL by 2021
• Apple Card (too sexy not to have) by 2021
• [X] Just one more cash back rewards card by 2021
• [X] Student Loans (27, yes, 27 of them) out of rehab and default by 6/2020
• [ ] FICO 670 by end of 2020: [ ]EX [ ]TU [ X ]EQ
• [X] PC Cap1 to QS 5/2020 - 100 days after opening; credit steps done 8/2020
• [X] PC Discover—to DiscIt 5% 3/2020
Message 4 of 5
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New Member

Re: Rehabbed Student Loans - FICO impact?

 @Sabii @Back2Reality 

 

these are the questions and answers I've been searching the entire web for! Lol. Currently rehabbing my SL . their 7 year mark to fall off is in August for EQ and they have already fell off EX and TU via early exclusion.  I really need that age of them because my credit profile is very new . Hoping those positive trade lines come back. I've finally realized how important on time payments and having good credit is. This forum has absolutely helped my turn my credit around for the good. I think I'll make a rebuilding post and tell my story. My scores have went up over 100 points since 4-15-20 .. literally a couple months! Thanks again and best wishes to you @back2reality 

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