SL defaulted ~ now paid off

[shaylabooboo]

Thanks to income tax refund garnishment my dh's SL are now paid off. We recieved documentation that they were considered paid in full from DOE.

 

Question is does the default go off of CR and mark paid or does that negative stuff still show. Do I need to do a dispute? I'm new to credit repair.

 

I signed us up for PG but haven't received the private access code, I assume comes in snail mail. So I don't have access yet to see if it has changed status.

 

When and if it does change status will his FICO go up?

 

Thanks!!!

[ziggypop]

Well, unfortunately, I don't think there's much you can do about the default notations now. I'm assuming that these were regular, federally-guaranteed loans (note that doesn't mean that they were issued by the federal government -- most SLs from private lenders are still federally backed). Were they in default when you paid them off or had they gotten out of default before that and then you paid them? It doesn't really matter now either way, but, if he was in default when you paid them off, you could have done what is called "rehabilitating" the loans where you make payments for 12 months, then the loan is re-insured by the government and then the negatives are removed. Unfortunately, now that you've paid them off, the negatives are stuck. You can try to dispute them, but SLs generally keep EXCELLENT records and tend to be a little unwilling to respond even to goodwill letters to remove 30 day late notations from 5 years earlier, let alone default notations. I'm not saying it's impossible (you may get lucky and your loan slipped through the cracks), but it's really pretty unlikely.

 

They will be marked that it's paid, but it will still say "paid after collection" or "paid collection account" or something to that effect.

 

The good news is that the effect of this will of course diminish as time goes by (and, in turn, his scores will go up) and, obviously, it will drop off the reports completely after the 7.5 years from the original late that led to the default. The bad news is that it's really unlikely that you will be able to dispute it away.

 

Probably not the answer you were looking for (to say the least!), but I hope it helps! Good luck!!

[ziggypop]

Oops, I just re-read your post (gee, that might have been more helpful BEFORE I wrote the first reply!) and just now noticed that you said that the loan was paid off through garnishment, not through you voluntarily sending your tax refund to them. I assume then that DOE was the lender? First of all, even in order to do rehab, you have to make 12 consecutive, monthly, voluntary payments, which, in your husband's case, would be in addition to the garnishment. The garnishments don't count as voluntary payments. DOE is also probably about the best record-keeper of them all and they are extremely unwielding about removing negatives (I even did technically complete rehab, but, due to the CA not reporting it correctly to DOE, they aren't even removing default notation in my case :evil: -- and I did make the 12 payments!!).

 

Not to bring you down further, but I wanted to give you all the info I had. Good luck with whatever you do try with this!!

[shop_free]

Thanks to income tax refund garnishment my dh's SL are now paid off. We recieved documentation that they were considered paid in full from DOE.

 

Question is does the default go off of CR and mark paid or does that negative stuff still show. Do I need to do a dispute? I'm new to credit repair.

 

I signed us up for PG but haven't received the private access code, I assume comes in snail mail. So I don't have access yet to see if it has changed status.

 

When and if it does change status will his FICO go up?

 

Thanks!!!

 

Just wanted to say that the same thing happened to me. My Student loans were paid off through garnishment of my taxes. About a few months later I disputed it and they all came off. Good Luck

[shaylabooboo]

Thanks!

 

His are still showing as defaulted with a balance although it's been paid off. We are going to dispute them soon.

 

How did you dispute yours?

 

Thanks!

[shop_free]

Sorry but i don't remember what I used.

I always use NOT MINE first, so that would be my choice.