I have a question about old charged off or delienquent student loans .....I have been reading here and have always been under the impression that new legislation was passed stating that student loans could be one of those items that "never go away" if they are late and you just ignore them - sort of like tax liens. Then, the other day, I was speaking to a good friend who is one of the higher-ups at Fair Isaac, and when I mentioned this he said I was dead wrong and he was sure of it...Student loans, he said, can only be reported for a certain time period just like other accounts. He was absolutely positive and resolute telling me this, so now I'm very confused since I thought they could stay on forever. As I said, he is one of the main guys at Fair Isaac, so could he be wrong?
No, he isn't wrong. They can and are reported for seven years from the date the account went delinquent and was never brought current. I would also like to hear your friends thoughts on FICO 08'.
Don't confuse reporting with the existence of the debt. While they may fall off your report, they are still collectible.
That makes sense - looks like mine says first delin. was in 2005 which is incorrect, it was in 2000, but if I cannot have it removed under that pretense, can I have it removed as reported because it has been sent to an outside collector?? I just received a notice two days ago that a new collection agency had the debt and they sent me the standard 30-day letter. So I am assuming it can no longer be reported as "dept. of ed collection" now on my file, is that accurate? (obviously it could be reported by the new collector, but I will cross that bridge when I get to it). Also re FICO '08 - basically the person I know at FICO says in a nutshell the difference is that if you have one item, like say one late mortgage payment, or one late cc payment, and everything else is on-time, positive, etc., under FICO '08 your score will jump quite a bit...i.e. it penalizes consumers less for "one screw-up", particularly once its two or three years out (like a regular aging would, but its accelerated under the '08 model). On the other hand, if you are a serial debtor and just keep accruing lates, repos, etc it will hurt your score more than the old model. So from what he explained, its main functionality change was to hurt fewer consumers who had that one old late payment and have kept their nose clean since then (he also said 'tax lien' and some other things, so I think the "one screw up" can be just about anything, so long as its one thing and you have done well since then). So from this, I think that old 'big bump' you used to get in FICO score once you get that last old derog off your file will no longer be so large, you would see the largest jump in your score when you go from two delin. trades to just one. Just my opinion though based on what I've heard.
