Your One Stop Resource for Saving Money.
Defaulted on Student Loan "Years Ago" - The Bills.com Blog
Bills.com Blog > Loans Questions > Defaulted on Student Loan "Years Ago"
Defaulted on Student Loan "Years Ago"
Tuesday, Jul 21, 2009
Question: Hi there, Years ago, I had defaulted on a student loan. Since then, I have made very timely payments above the minimum for over three years. On my credit report, the loan still shows as in default. To fix this, I was told that I need to rehabilitate the loan which would then delete the "default" status loan. However, by this time next year, I expect to have saved enough money to pay off the rest (about $4-$5,000) of the loan completely. Would it be better to wait and pay off the loan to the originating government agency? Or would it be better to rehabilitate the loan and pay it off to the new agency that buys it? Are there additional fees/interest the rehabilitating agency may charge that would make that option disadvantageous? Thanks for your help!
Answer: Typically, if you default on a student loan, a lender will agreed to remove the default listings from your credit report after receiving 9 to 12 months of on-time re-payments. I don't know what kind of loan you have or who specifically is holding it, but given that you have paid timely, over-the-minimum
payments for over 3 years, you and/or your lender missed something along line that should of allowed this of been deleted by now.
To fix this, I'd start off by visiting the government's Federal Student Aid website . It contains a tremendous amount of information regarding student loan defaults, including how to get them removed from your credit report . Once you've studied-up a bit on that information, I suggest contacting their office directly - by telephone: 800-621-3115, or by email: drghelp@ed.gov - and explain this situation and ask for them for recommendations as to how best to address this.
StudentLoanBorrowerAssistance.org also has a terrific amount of helpful information on this topic.
Since you mentioned that you defaulted "years ago," I want to point
To fix this, I'd start off by visiting the government's Federal Student Aid website . It contains a tremendous amount of information regarding student loan defaults, including how to get them removed from your credit report . Once you've studied-up a bit on that information, I suggest contacting their office directly - by telephone: 800-621-3115, or by email: drghelp@ed.gov - and explain this situation and ask for them for recommendations as to how best to address this.
StudentLoanBorrowerAssistance.org also has a terrific amount of helpful information on this topic.
Since you mentioned that you defaulted "years ago," I want to point
out that a default falls off your credit report after 7 years. So if that seven year mark is just around the corner and you have no immediate plans to take out additional forms of credit (such as a loan for school, a car, or a house) you may decided that it's best to just wait a bit and let it fall off your report.
Whatever route you take, be sure to obtain a free copy of your credit report every year via www.annualcreditreport.com.
Also, the Federal Trade Commission has a terrific website covering credit reports, including how to address inaccuracies (the reports are infamous for containing errors).
I hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com/blog/
Whatever route you take, be sure to obtain a free copy of your credit report every year via www.annualcreditreport.com.
Also, the Federal Trade Commission has a terrific website covering credit reports, including how to address inaccuracies (the reports are infamous for containing errors).
I hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com/blog/
Also, make sure to get a free financial health check-up with Bills IQ!
Your comments
Bill has answered thousands of money-related questions from readers on debt consolidation and settlement, home mortgage, credit reports and scores, auto and other loans, insurance, and others.
If you have a money question that has not been answered previously Ask Bill your question and be better informed.
Now get a free financial health check-up with Bills IQ!
Information provided by Bills.com is for general informational purposes only and is not be
construed as legal, financial, bankruptcy, tax or other professional advice. Should you
require more detailed information or specific professional advice tailored to your situation you
should consult an attorney, financial planner or tax advisor.
While we believe all information provided by Bills.com to be accurate as of the date of its posting, we cannot ensure its accuracy. Use of this site and any information contained on or provided through this site is provided without any representations, warranties or guarantees. Bills.com is not responsible or liable for any decisions or actions anyone may take based on the information provided. Please see Terms of Use.
While we believe all information provided by Bills.com to be accurate as of the date of its posting, we cannot ensure its accuracy. Use of this site and any information contained on or provided through this site is provided without any representations, warranties or guarantees. Bills.com is not responsible or liable for any decisions or actions anyone may take based on the information provided. Please see Terms of Use.
© 2006 - 2010Bills.com LLC. All Rights Reserved.