original balance vs. outstanding balance

[lori_nj]

I just recently got denied credit yesterday , one that was pointed out to me to the branch manager was my student loans. No late payments, never defaulted, never was late. I am currently in a defrement payment will resume on 8/07. On my CR the loan shows one balance being 12,000 and another being 14,000. Went online to the salliemae site and my loans displays Original principal balance 12, 688.84 / Capitalized int 2,124.42 / Outstanding balance 14, 442.17 / Accrued int 46.95.

 

How can I correct this, I was told that this looks negatively on my credit report.

 

Should I dispute this, what course of action do I have?

 

If it means anything the loan was consolidated into one loan.

 

 

I apologize if this question has been ask before, I do not ususally visit this the student loan area of the forum.

 

Thanks

 

 

Lori_nj

[lori_nj]

bump

[LynnInMN]

There is nothing to correct from what I see.

[lori_nj]

Thanks for the reply, does that mean that the two be reported with different loan balances? Is this look upon negatively?

[Cynic]

Well, you borrowed the original amount, chose to postpone payments, and capitalization of interest has made what you currently owe more then what you borrowed.

 

It's factual and accurate to report this. You have no valid dispute.

 

Want better credit? Pay it down fast, so the current balance is less then what you originally borrowed.

[blinky]

Are you sure that was the only reason? I mean everyone will always have this especially if you go through school for 4 years 'cause the interest starts from the date of the loan, not your repayment date and other people aren't denied for this alone (I walked out with 10 years of capitalized interest for a couple of mine).

Do you have anything else listed as a derog? Or maybe just a short credit history?

[cotterpin]

She owes 14k, correct?

 

So can someone please explain why it's correct for there two be two tradelines BOTH showing a balance, making it appear she owes 26K???

 

I took it to be that the negative part is that it appears she has double the amount owed than she actually does.

 

Wouldn't the original tradeline show as paid/closed or at minimum a zero balance since it was consolidated?

 

Someone tell me where it says that they should both show as open if there was consolidation done and it was included.

 

According to the OP her balance started at 12k and rose to 14K. I don't think that's where the problem lay. I think what she is questioning is the TWO tradelines on her report showing as open with high balances....

 

but feel free to correct me.

[TxQuiltGirl]

Well, you can't be corrected Cotter, until we have more information from the OP.

 

When you consolidate SLs, it still is two lines - a subsidized and an unsubsidized. So there very well may be two lines - one with a balance of $14k and one with a balance of 12k.

 

OP needs to look at her paperwork and see exactly what she agreed to - how much she borrowed etc. Then she can tell us whether or not she borrowed 12k or more. I can't tell based on the very limited info in her OP.

 

 

 

ETA: If OP was denied credit because of these SLs - and only because they were in deferment - then I would suggest OP look elsewhere for someone who is competent at reading credit reports. It doesn't take a rocket scientist to see "deferred" on a CR, and I've NEVER been told that it has a negative connotation. I just bought a house with 26k in SLs deferred.

Edited July 12, 2007 by TxQuiltGirl

[cotterpin]

Well, you can't be corrected Cotter, until we have more information from the OP.

 

When you consolidate SLs, it still is two lines - a subsidized and an unsubsidized. So there very well may be two lines - one with a balance of $14k and one with a balance of 12k.

 

OP needs to look at her paperwork and see exactly what she agreed to - how much she borrowed etc. Then she can tell us whether or not she borrowed 12k or more. I can't tell based on the very limited info in her OP.

 

ETA: If OP was denied credit because of these SLs - and only because they were in deferment - then I would suggest OP look elsewhere for someone who is competent at reading credit reports. It doesn't take a rocket scientist to see "deferred" on a CR, and I've NEVER been told that it has a negative connotation. I just bought a house with 26k in SLs deferred.

 

 

Why would a consolidated SL show as two open tradelines? Why wouldn't the old tradeline show as zero and the new one show as a balance? I know when you take out a student loan there normally is an unsubsidized and subsidized portion, but isn't the point of consolidating to merge all your loans into one?

 

The OP says her balance according to Sallie Mae is 14K but the way she described her CR is that it shows 26K worth of open loans.

 

And congrats to you for your house, but maybe your 26k in student loans didn't affect your Debt to Income ratio as much as the OP's did?

 

But the deferment shouldn't show as negative and the branch manager may very well be untrained in that aspect.

[TxQuiltGirl]

Why would a consolidated SL show as two open tradelines? Why wouldn't the old tradeline show as zero and the new one show as a balance? I know when you take out a student loan there normally is an unsubsidized and subsidized portion, but isn't the point of consolidating to merge all your loans into one?

 

The OP says her balance according to Sallie Mae is 14K but the way she described her CR is that it shows 26K worth of open loans.

 

And congrats to you for your house, but maybe your 26k in student loans didn't affect your Debt to Income ratio as much as the OP's did?

 

But the deferment shouldn't show as negative and the branch manager may very well be untrained in that aspect.

 

 

I wasn't saying that my 26k in SLs had anything to do with anything - I was just saying that depending on the type of loan the OP applied and was denied for, a simple deferred notation should not appear to be negative.

 

And even when a person consolidates loans, there are STILL subsidized and unsubsidized lines - one of each. You make one payment for them both, but when/if deferment or forebearance is necessary, they are treated differently depending on the circumstances for deferment. Therefore they have to be kept separate.

 

Without actually seeing what the OP saw, neither of us know for sure how the credit report looks ... but the only thing I can think of without seeing it is that there may be two lines in deferment. I really can't guess, but if it were me, I'd be on the phone to SM to find out what's up.

[fla-tan]

I just recently got denied credit yesterday , one that was pointed out to me to the branch manager was my student loans. No late payments, never defaulted, never was late. I am currently in a defrement payment will resume on 8/07. On my CR the loan shows one balance being 12,000 and another being 14,000. Is this on the same or different credit reports? If this is the same credit report it would appear that the credit report is showing a subsidized and an unsubsidized loan balance which is normal when you have mixed loans. If it is different credit reports then it appears that one credit report is showing the capitalized interest while the other is not. If subsidized student loans are in deferment they do not accrue interest. If subsidized student loans are in forbearance they do. Unsubidized student loans accrue interest whether they are in deferment or forbearance. Went online to the salliemae site and my loans displays Original principal balance 12, 688.84 / Capitalized int 2,124.42 / Outstanding balance 14, 442.17 / Accrued int 46.95. This would indicate a single unsubsidized consolidated student loan. Servicers, slma in this instance, will generally capitalize interest quarterly though some may do it more often. What the line you show indicates that the original loan balance was $12,688.84, since your last payment (if you ever made one...it is not a negative if you didn't and the loan is in either deferment or forbearance) slma has capitalized $2124.42 in accrued interest for a total loan balance of $14,442.17. In addition it shows that you have an additional $46.95 in interest that has accrued but has not been capitalized yet. This is both normal and appears to be accurately reporting. I don't see anything to dispute.

 

How can I correct this, I was told that this looks negatively on my credit report. Then the credit report is being read by somebody that doesn't know how to read student loans on a credit report. It should not look as a negative.

 

Should I dispute this, what course of action do I have? There really is nothing to dispute.

 

If it means anything the loan was consolidated into one loan.

 

 

I apologize if this question has been ask before There is nothing to apologize for., I do not ususally visit this the student loan area of the forum.

 

Thanks

 

 

Lori_nj

 

 

fla-tan

[fla-tan]

Well, you borrowed the original amount, chose to postpone payments, and capitalization of interest has made what you currently owe more then what you borrowed.

 

It's factual and accurate to report this. You have no valid dispute.

 

Want better credit? Pay it down fast, so the current balance is less then what you originally borrowed.

 

Cynic

 

If you want to continue posting here you will park your attitude at the door. The part of your response that I highlighted was not necessary, nor was it accurate. Installment loans, and that is what student loans are, do not change scores based on utilization, only revolving debt does. You can either post in a helpful and friendly manner or you can lose your posting priveleges. I will not allow you or any other member to stand in judgment of the members that come here for assistance or to learn. If you want to continue here I would strongly suggest that prior to hitting enter on a post, reread the post and ask yourself how would someone else perceive my response. Then if you still think it is helpful without being judgmental then hit enter, otherwise hit delete.

 

 

fla-tan

Forum Moderator

[fla-tan]

Well, you can't be corrected Cotter, until we have more information from the OP.

 

When you consolidate SLs, it still is two lines - a subsidized and an unsubsidized. This would be correct only if there were both subsidized and unsubsidized loans. However, it appears from what the OP posted there may very well only be a single undubsidized consolidated loan. But what you said about needing more information to know is correct. So there very well may be two lines - one with a balance of $14k and one with a balance of 12k.

 

OP needs to look at her paperwork and see exactly what she agreed to - how much she borrowed etc. Then she can tell us whether or not she borrowed 12k or more. I can't tell based on the very limited info in her OP.

 

 

 

ETA: If OP was denied credit because of these SLs - and only because they were in deferment - then I would suggest OP look elsewhere for someone who is competent at reading credit reports. I tend to agree with this statement. It doesn't take a rocket scientist to see "deferred" on a CR, and I've NEVER been told that it has a negative connotation. I just bought a house with 26k in SLs deferred.

 

 

fla-tan

[fla-tan]

Well, you can't be corrected Cotter, until we have more information from the OP.

 

When you consolidate SLs, it still is two lines - a subsidized and an unsubsidized. So there very well may be two lines - one with a balance of $14k and one with a balance of 12k.

 

OP needs to look at her paperwork and see exactly what she agreed to - how much she borrowed etc. Then she can tell us whether or not she borrowed 12k or more. I can't tell based on the very limited info in her OP.

 

ETA: If OP was denied credit because of these SLs - and only because they were in deferment - then I would suggest OP look elsewhere for someone who is competent at reading credit reports. It doesn't take a rocket scientist to see "deferred" on a CR, and I've NEVER been told that it has a negative connotation. I just bought a house with 26k in SLs deferred.

 

 

Why would a consolidated SL show as two open tradelines? You are assuming that they are? I have asked the OP whether or not she is looking at a single or 2 credit reports and until we know the answer to that we can't know. Why wouldn't the old tradeline show as zero and the new one show as a balance? More likely it would show as multiple tradelines transferred to another lender through consolidation, or simply as paid off through consolidation. The only way a single student loan tradeline can show as $12000 is if it is already consolidated. The maximum single student loan is much less than that since each individual dispersement is considered a seperate loan. I know when you take out a student loan there normally is an unsubsidized and subsidized portion, but isn't the point of consolidating to merge all your loans into one? Servicers have to keep the subsidized and unsubsidized portions seperate since they are treated differently in deferment. For all intents and purposes they are a single loan but in reality they are acctually 2 seperate loans.

 

The OP says her balance according to Sallie Mae is 14K but the way she described her CR is that it shows 26K worth of open loans. This may be correct if she is only looking at a single credit report but we don't know that yet.

 

And congrats to you for your house, but maybe your 26k in student loans didn't affect your Debt to Income ratio as much as the OP's did?

 

But the deferment shouldn't show as negative and the branch manager may very well be untrained in that aspect. Student loans in deferment/forbearance do not show as a negative but they can affect debt ratio.

 

 

fla-tan

[Cynic]

She owes 14k, correct?

 

So can someone please explain why it's correct for there two be two tradelines BOTH showing a balance, making it appear she owes 26K???

 

OP owes 14k, which is more then the original "high credit amount" of 12k. This is "potentially negative" because installment accounts with lower current balances then original balances may improve a credit score, and the opposite situation can have an opposite effect.

 

There is no indication that OP owes 26k, and unless the OP has very little credit history this particular installment account having a lower original balance then the current balance would not carry much weight. The OP can improve this rating by: 1) Making large payment to lower Current Principle Balance (CPB) to an amount lesser then the Original Principle Balance (OPB), or 2) Consolidating (OPB of consol loan would be what is currently owed, including cap int) and making payments on a STANDARD repayment plan on the consol (ISR/ICR or GRP would not guarantee a decrease in balance).

 

I took it to be that the negative part is that it appears she has double the amount owed than she actually does.

 

That appears to be completely incorrect.

 

Wouldn't the original tradeline show as paid/closed or at minimum a zero balance since it was consolidated?

 

There was no indication whatsoever in the information OP provided that the loan was consolidated, or that there were two tradelines. I am curious what basis you had for those assumptions.

 

Someone tell me where it says that they should both show as open if there was consolidation done and it was included.

 

The information indicates ONE account with a HIGHER CURRENT BALANCE then ORIGINAL BALANCE. There are not two accounts, there are two BALANCES and one is CURRENT BALANCE and one is ORIGINAL BALANCE.

 

According to the OP her balance started at 12k and rose to 14K. I don't think that's where the problem lay. I think what she is questioning is the TWO tradelines on her report showing as open with high balances....

 

There appears to be one tradeline, one account, and normal valid reporting of historical and current information corroborated by SLMs website. OP, please correct me if I am missing something.

 

but feel free to correct me.

Edited July 13, 2007 by Cynic

[lori_nj]

Thanks everyone for their responses, I had to work on my DH credit, he was served with papers had to file an answer with the courts.

 

FLA-tan, thanks for the info, yes this is one tradeline on all CR. I agree I dont know why the branch manager was putting so much emphasis on the SL. Yes i'll take my business elsewhere. But there are 2 baddies left, Crap 1 that CO in 2003 and showing 30 days late and premium asset recovery 30days late as well, working diligently to get these off.