I am three months late on my student loans. The total of the late payments is $7000.0. My FICO took a big drop. I have since got my loans deferred. But my credit report still reflects the late payments. Should I catch up and pay on the late payments or would it be better to direct more money toward my existing balances on my credit cards in order to get a better for a FICO score?
Hello, I am an extreme newbie to this forum but I have plenty of experience with student loans (70k'ish of loans from 2 different schools and 9 years of classes including private and government backed loans). I am not sure why you would still have a past due payment if they deferred them. Are you still in school? If so, as long as you are taking at least 6 credits you fall within your grace period and do not have to worry about paying them back for 6 months after the completion of your degree. Sometimes the financial aid department messes up and your grace period clock starts ticking away. You will get notices to start paying your loans back. A quick call to your school should fix this. A defferment usually means that you are still in school or within your grace period. Unless you were under the 6 credit hour limit for more then 6 months it should not be your fault. Now if you are finished with school and past the grace period and were late on your loans then its a little bit more complicated. You usually can't get a defferement at this point (its called a forbearance). I was in a similar situation last year. One of my loans didnt have a grace period (it was a consolidated loan from an earlier degree) and kicked in before i graduated because my last semester was only 3 credits. i was 90 days late before i realized it. i called the loan company and they put the loan into voluntary forbearance for a year (you can do this in 6 month increments for up to 3 years where you dont have to pay...doesn't matter what your income level is...but don't forget about the extra interest thats adds up!) The point i want to get to though is that they changed the date on the forbearance so it showed that i was not late on my payments. they would not remove the lates from my credit but at least i dont have to worry about those payments. Sometimes they want money to do this and sometimes they dont but it is worth looking into if you haven't already. Are your loans in collections? be careful with fafsa loans, as the government backed ones will take your tax return or garnish your wages if it gets that far. Sorry this is such a long post!
