Student loan rehab questions

[Bellasmom15]

I started the process of rehabbing my defaulted student loans and I have a couple questions...

1. On time payment #9 is due July 16th and is set to come out of my account by auto pay. What do I do then? Contact reliant capital, the ones holding my defaulted student loans?

2. What negative information will be deleted once the rehab is complete?

3. One of my loans has a ridiculously small original amount of $8 with a current balance due of $9.... I literally have that in my pocket right now and would like to pay that one off completely just because it's so small. How much of an impact will that have once I'm out of default?

3. I've noticed that the US DOE collections isn't reporting my loans right. Only two of my loans has the original loan amount listed correctly on all 3 CRA'S reports, one of them being the $8 one. All the rest of them say original loan amout $8 with current due at $1,000 give or take a little bit. So, it literally looks as though I owe $1,000+ on an $8 loan! How much of an impact does that have on my score and possible credit decisions? I plan on disputing it, of course.... should I do it now or when rehab is completed? Its apparently been reported that way since well before I started rehabbing.

[glockrunner]

1. The servicer will contact you to set up a payment plan after the sucessful rehab.

2. Remove all negatives that you are paying listed in the rehab. Exactly what they will put as status is unknown. Although it won't be negative on the report. My daughter is going through rehab but she is only 1 payment into it. Someone who has gone through this will chime in on what they state on the accounts. They may remove them and report your new account you will have with the servicer.

3. I wouldn't dispute anything. You should sit it out. Your credit will be impacted no matter what with these defauled loans.

All this information should be on the agreement.

[calyx]

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@Bellasmom15 wrote:
I started the process of rehabbing my defaulted student loans and I have a couple questions...

1. On time payment #9 is due July 16th and is set to come out of my account by auto pay. What do I do then? Contact reliant capital, the ones holding my defaulted student loans?

Your servicer will contact you.  Sometimes it's a new servicer, sometimes not.  Just wait.

2. What negative information will be deleted once the rehab is complete?

The only thing guaranteed to be removed is the default.   You will have a positive tradeline dated back to the opening of that loan.
SOME servicers remove lates and other information, so you start with a clean slate, but some do not.   None of this is mandated, only the removal of the default.

3. One of my loans has a ridiculously small original amount of $8 with a current balance due of $9.... I literally have that in my pocket right now and would like to pay that one off completely just because it's so small. How much of an impact will that have once I'm out of default?

On your score?  Likely little to none - FICO scoring seems to look at the percentage of the utilization for scoring purposes.   Paying off that 8-9 is good and will at least clean things up a bit for you.  You'll have one more positive paid off tradeline, which is always nice.

3. I've noticed that the US DOE collections isn't reporting my loans right. Only two of my loans has the original loan amount listed correctly on all 3 CRA'S reports, one of them being the $8 one. All the rest of them say original loan amout $8 with current due at $1,000 give or take a little bit. So, it literally looks as though I owe $1,000+ on an $8 loan! How much of an impact does that have on my score and possible credit decisions? I plan on disputing it, of course.... should I do it now or when rehab is completed? Its apparently been reported that way since well before I started rehabbing.

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Don't dispute anything now.  It's going to take some time for all of the data to sort out correctly and get posted right (it could take months - after just consolidating two loans into 1, it took my loan 4 months to report and report correctly.   When I rehabbed many moons ago, I wasn't watching my credit report, so I can't tell you how long it took, but it can take a good long while.    
Make sure that you talk to the servicer and not the CRAs - if you can get it resolved without a CRA dispute, that would be better.
Installment loan amounts/utilization have a lot less impact on your FICO scoring and credit decisions than a lot of other factors (primarily revolving utilization and payment history), so don't stress too much about it.   Getting rid of the defaults and having positive tradelines are way more important.

In addition, if your rehabbed loan ends up with a new servicer (mine did), the new one might report everything correctly anyway, saving you the trouble.

Is your data at the NSLDS correct when you look at it?

I know patience with these issues is hard - I made a lot of mistakes in my impatience, so I totally get the urge to FIX IT NOW, but it's not always the best practice (I wish I'd read these boards more before I went charging in!)

Good luck!

[Bellasmom15]

Thanks for the advice! Its definitely helpful! I think I'm going to try and contact the servicer Monday about the loan amounts being reported incorrectly... it shows up on the NSL website correctly.... but on all my credit reports it shows I owe $1,000+ on some measly $8 loans. It's been reported that way since its been with thos one servicer too, which has been a couple YEARS, ugh.

I won't dispute it through the CRA'S since that does seem like something that would provoke them and I'm really trying to get it all sorted. I've been denied credit on more than one occasion due largely in part to the fact they're being reported wrong though, and it's a little upsetting. Reliant capital solutions was amazing In working with me on getting the $5 payment plan, so I'm hoping they'll be open to fixing their error to help me out a little bit more if I just kindly explain to them that I was in a horrible position with all that was going on with my kids at the time and totally spaced on getting the loans deferred until it was too late.

[Anonymous]

If it was me, I wouldn’t pay off that $9 loan until the rehab was complete and default removed from CR, just to be safe.