I have a student loan which is in default and is in collection. I have read that in order to have the negative record deleted from the credit report, I have to apply for loan rehabilitation and make 12 consecutive payments. However, I would prefer to make one payment in full without applying for rehabilitation. Will this also remove the negative record on my credit report? Or do I have to go through the rehabilitation process in order to improve my credit? Thank you again for your help.
They will not except 1 big payment because it does not show that you have learned your lesson about paying the loan back on time. The was a case with someone where after a few payments the SL company took the loan outta rehab and put it back in good standing, but I believe that was a mix up on their part.
Actually, if you are within the 60 day administrative review period (i.e. within 60 days after the guaranty agency purchases the loan in default from the previous lender) and you enter into any repayment arrangement, after your first payment, the guarantor and any 3rd party collection agency is not supposed to report the default to CRA's by regulation (34 CFR 682.410(b)(5 or 6). If the 60 days has already passed, your only option is to make 12 on-time monthly payments pursuant to a rehabilitation loan consolidation.
Nook, Whatever you do - DO NOT make one big payment like you said, as all the derrogs will STAY on your reports. I've already been through all this, and can speak from experience Start the rehab with the collection agency or the creditor and wait out the 12 month - its well worth the time and effort as the negative listings will disappear and one new positive tradeline will appear. -Sal
Nook, Whatever you do - DO NOT make one big payment like you said, as all the derrogs will STAY on your reports. I've already been through all this, and can speak from experience Start the rehab with the collection agency or the creditor and wait out the 12 month - its well worth the time and effort as the negative listings will disappear and one new positive tradeline will appear. -Sal
