Hi there- I have a 60 day late on a student loan that is wrecking my credit. Just received notice from 2 credit cards before I was aware. One closed (it had been inactive) and the other reduced my limit. I have been working hard since divorce to try and build a good credit score, so really, this was just a stupid mistake on my part. My question is, what is my best and quickest course of action to repair this mistake? Do I: 1. Call the loan company and plead for them to take them off? 2. Pay the loan off so that the account doesn't show the late pays? The latter would be a strain, but I could potentially do this. Any adice is greatly appreciated.
Quite frankly I doubt any of those would do you all that much good. Out of the two options however I tend to think that pay off the loan would increase your score the most but the late will still stay there whether you pay it off or not. The gain would come from lowering your overall indebtedness. There are better options than either of the above. One might be to check out the William B. Ford option at the web site of the Department of Education (DOE) My understanding is that if you enroll in that program and keep your payments up for a year they will pull all the negative reports and cause your reports to show clean and green all the way. Yes, there may be a serious downside to that suggestion which is that in order to become eligible to get on the Ford program you will probably have to let the SL loan go really, seriously delinquent for several months. That could also mean other cards or other credit you have in good standing can go south on you as well. I'm no credit repair expert but I'd say the best bet is to just keep on making your payments to all of them timely, get current on any you might be behind on and start disputing the student loan one trying to get rid of it that way. Who knows, you just might get lucky and get rid of the adverse listing that way.
As Bill said, paying the loan off won't make the late pay go away. And no matter what you do, you won't be able to get the closed credit card back. Credit issuers can close your credit card whenever they like, especially due to inactivity. If your credit reports show inaccurate or missing information in relation to this late pay, dispute it through the CRAs and you might get it removed. Otherwise, you may just need to wait it out. The late pay will have less and less of an effect on your overall credit scores as time passes.
