@Anonymous wrote:
I have $120k in SLs that are defaulted with the US Department of Education. They aren't in collections and I've started the rehab process. I just got notice that it starts November 11th.
My question is, how soon after rehabilitation is complete do I see a change in the default status on my credit report? Also, is there typically a bump in credit score or a drop once the loans are reinstated? What factors into that?
Nothing changes until rehab is completed. Some have had luck within a couple weeks and other months. It just depends on many factors like servicer and how long it takes for them to be picked up/reinstated.
How long it is reflected on the NSLD, etc. also varies.
Once they default, they are technically in collections. If you have to go through another servicer for the rehab that is seperate from the original servicer, they are in collections (same thing as defaulted). You likely have the original SLs and the defaulted/CA ones reporting on your CRs, yes?
Many report a score bump, but there is little way to tell how much, as each credit profile and SLs are unique. If you have lates reporting still that are old (like 6 years old range) and are going to fall off during rehab or the original SLs are so old they have already, that is good, and perhaps you will get a higher score boost. Again, too many factors to predict if you will.
If you have lates reporting that have years to go before aging off, it is a 50/50 chance the lates will stay. The only thing that for certain gets removed is the default status and CAs. There is no guarantee that the lates will be removed and are not required to be removed. There is no rhyme or reason as to why some people get them removed and others do not, so we cannot predict if they will be removed.
It will also depend on if you have TLs older than the SLs themselves. If you do not, then you may see a bump as your AAoA goes up once the "new" old TLs report after they are rehabbed and picked up/reinstated by a servicer(s). If you have older TLs, you may or may not see a bump since it may either increase or decrease your AAoA, depending on your entire credit profile.
Congrats on making the move to rehab your SLs and good luck!
