Question about defaulted loan.

[Lars ostrich]

Have an old student loan thats so old its no longer on my credit reports. If I rehab will this bring back my negative payment history on credit file?

[Cynic]

No.

[Lars ostrich]

anyone else have any opinions on this?

[jcs0527]

Student loans are never supposed to be OFF your report, so I guess you got lucky.

 

It is better to rehab them because they will get their money regardless.

 

Better to go to them then have them come to you.

[SharonKY]

I just finished my student loan rehab program for the Direct Loans (mine were unsubsidized). I had been in default for around a year before I went into rehab. Once I finished they sent me a letter saying they would remove negative remarks but I wasn't sure if it was all or just the defaulted remarks.

 

The next month, Equifax & TransUnion score had risen 50 points and were showing no negative remarks for all the years of my loan!!

 

Experian hasn't updated yet and they have been reporting several defaulted student loans totaling much more

[TxQuiltGirl]

Student loans are never supposed to be OFF your report, so I guess you got lucky.

 

 

This is incorrect. Depending on the age of the OP's loans they can very well be off the reports.

 

OP - No, it will not hurt you to rehab them. It will do no harm, but if you leave them, there will be nothing good to come of it. If they are so old as to be off the reports, though, I think I'd do a consolidation, not a rehab.

[Lars ostrich]

The loan is now owned by a CA. I called and they are mailing me the rehab agreement so i have something in writing. I was told After I finish the rehab period the sl will go back to the oc. I'd rather do the rehab for now and get it started, i guess i could always consolidate later. I just want to get this from hanging over my head.

 

This loan hasnt been on my cr in a few years now (yes its been defaulted that long). What would be the benefit of consolidating as opposed to rehab. I want to buy a house sometime after rehab. Wouldn't a consolidated loan show up on my cr whereas my rehab would not?

[LynnInMN]

The loan is now owned by a CA.

Student loans are NEVER owned by a CA. When you default, your guarantor pays your claim, and they assign it to a CA.

 

I called and they are mailing me the rehab agreement so i have something in writing. I was told After I finish the rehab period the sl will go back to the oc. I'd rather do the rehab for now and get it started, i guess i could always consolidate later. I just want to get this from hanging over my head.

 

This loan hasnt been on my cr in a few years now (yes its been defaulted that long). What would be the benefit of consolidating as opposed to rehab. I want to buy a house sometime after rehab. Wouldn't a consolidated loan show up on my cr whereas my rehab would not?

 

Your new rehabilitated loan WILL appear on your credit report, as will a consolidated loan.

[TxQuiltGirl]

The loan is now owned by a CA. I called and they are mailing me the rehab agreement so i have something in writing. I was told After I finish the rehab period the sl will go back to the oc. I'd rather do the rehab for now and get it started, i guess i could always consolidate later. I just want to get this from hanging over my head.

 

This loan hasnt been on my cr in a few years now (yes its been defaulted that long). What would be the benefit of consolidating as opposed to rehab. I want to buy a house sometime after rehab. Wouldn't a consolidated loan show up on my cr whereas my rehab would not?

 

 

The consolidation will get it over that much quicker. You don't have to worry about bad TLs on your report, which is why a rehab probably isn't your best option. Were I in your position, I would pursue the consolidation and forget the rehab.

[Lars ostrich]

The loan is now owned by a CA. I called and they are mailing me the rehab agreement so i have something in writing. I was told After I finish the rehab period the sl will go back to the oc. I'd rather do the rehab for now and get it started, i guess i could always consolidate later. I just want to get this from hanging over my head.

 

This loan hasnt been on my cr in a few years now (yes its been defaulted that long). What would be the benefit of consolidating as opposed to rehab. I want to buy a house sometime after rehab. Wouldn't a consolidated loan show up on my cr whereas my rehab would not?

 

 

The consolidation will get it over that much quicker. You don't have to worry about bad TLs on your report, which is why a rehab probably isn't your best option. Were I in your position, I would pursue the consolidation and forget the rehab.

 

I still have not recieved anything about my rehab. I was told they would be mailing out a rehab agreement and I would recieve it in a few days.

[InstantNoodles]

I still have not recieved anything about my rehab. I was told they would be mailing out a rehab agreement and I would recieve it in a few days.

 

If you haven't received your agreement and this is indeed the direction you'd like to go, I'd suggest calling the PCA and ask when it was sent and does it need to be resent. They won't call you if you don't return it. (Our agency does but that's more of a courtesy and there's no promise they'll do it...the agency will probably push rehab if you want to change your mind, the payout is better for them than a consolidation which they receive no credit for).

[Lars ostrich]

I still have not recieved anything about my rehab. I was told they would be mailing out a rehab agreement and I would recieve it in a few days.

 

If you haven't received your agreement and this is indeed the direction you'd like to go, I'd suggest calling the PCA and ask when it was sent and does it need to be resent. They won't call you if you don't return it. (Our agency does but that's more of a courtesy and there's no promise they'll do it...the agency will probably push rehab if you want to change your mind, the payout is better for them than a consolidation which they receive no credit for).

 

 

Im doing rehab because if it appears on my CR I can dispute it as being beyond SOL for reporting. The amount I owe wont affect my credit score this way either. If I rehab a new tradeline will appear and my debt (as far as fico is concerned) will be 4x what it is now.

[LynnInMN]

If the loan is NOT on your credit report now, there really is little point of rehabbing. It you rehab now and then consolidate later, you will have 2 tradelines....one for the rehab and one for the consolidation. At this point, you might as well go straight to consolidation.

[Cynic]

If the loan is NOT on your credit report now, there really is little point of rehabbing. It you rehab now and then consolidate later, you will have 2 tradelines....one for the rehab and one for the consolidation. At this point, you might as well go straight to consolidation.

 

One potential benefit to rehab vs. consol in this situation for borrower is limitation of collection costs capitalized into rehab repurchase to 18.5% of the principle and interest outstanding instead of up to 24% per year in default included in the consol.

 

Again, rehab will not cause re-posting of negative history that has already aged off to your credit report, OP.

Edited July 13, 2007 by Cynic

[jcs0527]

Ok My husband defaulted on his student loans longer than 7 years ago and they are still on his report. I was under the impression that they do NOT come off your report because of our experience.

I am going to dispute the defaulted loan that he is rehabilitating as obsolete.

Would that be the right thing thing to do?

[Saria]

I still have not recieved anything about my rehab. I was told they would be mailing out a rehab agreement and I would recieve it in a few days.

 

If you haven't received your agreement and this is indeed the direction you'd like to go, I'd suggest calling the PCA and ask when it was sent and does it need to be resent. They won't call you if you don't return it. (Our agency does but that's more of a courtesy and there's no promise they'll do it...the agency will probably push rehab if you want to change your mind, the payout is better for them than a consolidation which they receive no credit for).

 

 

Im doing rehab because if it appears on my CR I can dispute it as being beyond SOL for reporting. The amount I owe wont affect my credit score this way either. If I rehab a new tradeline will appear and my debt (as far as fico is concerned) will be 4x what it is now.

 

 

I don't think that will work because once you comeplete rehab, you'll have a completely new loan, hence a new tradeline. The new tradeline will be a positive one though. At least that's what happened when I rehabbed mine. Hopefully an expert will correct me if I'm wrong on this point.

[LynnInMN]

I still have not recieved anything about my rehab. I was told they would be mailing out a rehab agreement and I would recieve it in a few days.

 

If you haven't received your agreement and this is indeed the direction you'd like to go, I'd suggest calling the PCA and ask when it was sent and does it need to be resent. They won't call you if you don't return it. (Our agency does but that's more of a courtesy and there's no promise they'll do it...the agency will probably push rehab if you want to change your mind, the payout is better for them than a consolidation which they receive no credit for).

 

 

Im doing rehab because if it appears on my CR I can dispute it as being beyond SOL for reporting. The amount I owe wont affect my credit score this way either. If I rehab a new tradeline will appear and my debt (as far as fico is concerned) will be 4x what it is now.

 

 

I don't think that will work because once you comeplete rehab, you'll have a completely new loan, hence a new tradeline. The new tradeline will be a positive one though. At least that's what happened when I rehabbed mine. Hoefully an expert will correct me if I'm wrong on this point.

 

Very correct. Essentially it is a new loan with a new start date.