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Discussion in 'Credit Talk' started by jamie, Dec 28, 2000.
No collections appear on my report. Could it be that student loan?
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It is the student loan. They will probably contact you soon, so when they do, tell them to send you a rehabilitation agreement. Rehabilitate and then you'll be fine.
Ask to work with Stephanie Nohr at Allied.
Thanks marci, I was wondering when they were going to catch up with me. I knew they would eventually. I just don't need 2 or more inquiries per month on my report from the same people. I'll just wait until they contact me. My student loan does not appear on any of the 3 reports right now. I wonder why?
How do they report the account? Do they report it as bad debt until you make so many payments? When does the clock start?
I should tell you that Allied Interstate collects for more items in addition to student loans, so they may be inquiring on a different collection account. If you don't have any other collection accounts, it probably is the student loan. If you do have other collections outstanding, it may be one of those.
Allied pulled an inquiry twice about a year before they called me about my student loan. I suppose they wait since they know the person will have to pay the loan eventually and they want to rack up the interest charges for as long as they can before they have to demand repayment. The longer you wait, the more money it will cost, since there is no such thing as a "settlement" with student loans.
If you call 1-800-4FEDAID, you can ask who is holding your loan and what the status is. Once you know that, you can call the loan holder who will refer you to whatever collection company (probably Allied) has the loan.
If they aren't reporting now, you're just lucky. They will report once you start rehabilitating, but it's moot since the completed rehabilitation will delete it after 12 months anyway. Just get all the credit you need before doing the rehabilitation and then sit tight for a year.
Thanks Marci. It's got to be the student loan, my report is perfect other than an account that truly isn't mine and I know for sure it can't be verified. I need to get that one taken care of first. I'll just wait till they call me.
The collection company should not report anything, since the loan is owned by the government via a government servicer. The servicer (loan holder) will probably begin reporting it as a "collection account" (I5) with a past due balance. My servicer only updated once a year, it seems.
If you consolidate after three months, it will be reported as a "paid collection account" (I5). If you rehabilitate, the entire tradeline is deleted. After that the only thing reported is the new loan holder who bought the loan after rehabilitation as "paid as agreed" (I1).
I know that some people seem to have student loans reported as "charge-off" - but I suspect those aren't federal guaranteed loans but rather private business student loans (i.e. Citibank, Plato, etc...)
So I'd be better off to rehabilitate 12 months, after that what happens, suppose I need 3 years to pay it off. Whould it be better to get a bank loan and take care of it once and for all?
A rehabilitation is simply a process where "servicer A" who holds the loan allows you to pay for 12 months in exchange for bringing it out of default AND deleting it from your credit report. After the 12th month "servicer A" sells your loan to "servicer B" and you start fresh with "servicer B" as if you had just walked out of college. You can do the 10, 15, or 25 year plan to pay the loan off. You can consolidate to "servicer C" if you like or whatever.
Example: I defaulted on 4 loans totalling $15,000. I had one consolidated (which I regret, since it's still on my CR) and the other 3 rehabilitated. Right after the rehabilitation, my loans were sold to a new servicer with a clean slate. I got on an income sensitive plan for 25 years with the new servicer, but since I don't like guarantee agencies, I then consolidated the now NON-defaulted loans with Direct Loans...
So in little more than one month, I got my loans out of default, deleted 8 tradelines from my CRs, and then moved them to Direct Loans for a low interest rate. I'm now on a 25 year payment plan.
In other words, you don't have to pay the loan off in 12 months to rehabilitate. You just have to pay 1.5% of the loan for 12 months. Then it gets sold to another servicer as a brand new non-defaulted loan with no negative credit history.
Hope this helps,
Sounds good, Jamie, though it's not simply what's on our reports that determine who we owe. You want to rack your brain to make sure you don't have any unpaid bills "out there" which haven't been taken care of - even if they aren't being reported. Allied may have one of these instead if there's unfinished business, so be careful!
Also, about the student loan, I think it's better to get it over with and start rehabilitating asap. If I were you, and I had the money, I'd initiate the call to Allied. The longer the loan is in collections and unpaid, the more money you'll owe due to *daily* accruing interest.
And if you wait, they will garnish your wages without your knowledge. It'll just be taken from your paycheck one day out of the blue. The garnishment is 10% of your monthly take-home budget and cannot be released or negotiated to a lower amount until it is paid off (unless you have a *really* compelling financial hardship). The loan I consolidated I had to because they garnished $200 a month for a $2000 balance and I make about 30K a year. I couldn't afford to allow the garnishment to continue for 10 months, so I had to consolidate after 3 months.
This all happened b/c I didn't take care of it when I could have done so on my own terms. :-(
Rehabilitation doesn't always work. I rehabilitated my loans and have yet to see the negative marks removed from my reports. I had to dispute with Trans Union to get it marked as postive. Experian and Equifax won't change it. I am starting my second dispute with them this week. Yes, I am sending in all the letters that Ed Fund has sent me just like last time.