Which date counts??

[swtprncess281]

Hi Guys,

Quick question because it seems there are several different answers to this question and I wanted to be clear that I understand.

I have a Sallie Mae private loan (that I wasn't even aware of) which went into default when I thought it was in forbearance with all the other Sallie Mae loans which had be consolidated and then paid as agreed with perfect history thus far.

Well I wanted to purchase a house and was informed by Charles that I would probably need to pay this since it was "federal"...but it was private so it didn't qualify for rehab like other "federals"..I know, I'm still confused to this day! Well Charles was going to look into how we should handle this then he went MIA. His last email stated that it would need to be paid so I started sending Sallie mae some payments. I've only sent two and i just noticed this week that my score has dropped 15 pts since Charles pulled it in Jan. I'm guessing since nothing else changed, I took a hit for updating the Sallie Mae loan. The last activity date use to be in 2002, but was changed to Feb 2009 (the month of my last payment)

NOW the question...this account is listed as a Charged off as bad debt. Does the "drop off" date reset since I started making payments?

NCO did not buy it but are the only ones I can communicate with on the settlement and honestly they have been for the most part very nice. I asked them to not call me at work and only call once a week at my home. I asked to only deal with the one gentlemen that I originally started with and so far he has held up to his end of the bargain. He calls to see how the settlement is coming along and reminds me that it may not be on the table forever and then without the hassle or guilt trips he hangs up.

I know I need to settle because it's "federal" and NCO claims once settled it will make a huge difference in my score because of the type of loan it is. I just need to know if it's going to be sitting there for 7 more years now instead of 3 since I've started to pay.

[Rick9972]

OK, I will try to answer and explain the best I can and then hopefully others will chime in with additional info.

1. Student loans never go away whether they are private or Federal. To further clarify, this means there is not SOL on them and you cannot discharge them through BK.

2. Completely differant from number 1 is the reporting on your Credit Report. This account will be on your CR @ seven years from the month the loan went bad. This date will not change unless your payments bring the loan current. (Not likely to happen as it has been charged off.)

3. Current reporting on this loan has probably brought your score down and will continue to do so. This is a common trick used by JDB's.

4. Settling the account will not help your score in the short term, but should stop the bleeding from Number 3.

5. Historically, Banks do not like outstanding "bad" debts and require them to be addressed (Paid off or settled) prior to doing a home loan.

[swtprncess281]

OK, I will try to answer and explain the best I can and then hopefully others will chime in with additional info.

1. Student loans never go away whether they are private or Federal. To further clarify, this means there is not SOL on them and you cannot discharge them through BK.

Yeah, I kinda figured that and I plan to just settle it, but I was more concerned about it being in black and white on my report

2. Completely differant from number 1 is the reporting on your Credit Report. This account will be on your CR @ seven years from the month the loan went bad. This date will not change unless your payments bring the loan current. (Not likely to happen as it has been charged off.)

Cool! So seven years even for a student loan? I was thinking it was 10...well that makes me feel better

3. Current reporting on this loan has probably brought your score down and will continue to do so. This is a common trick used by JDB's.

I thought so. After reading your reply I changed the auto pay for my student loan to only include my current loans in repayment status. I'll just pay this one in one lump sum when possible instead of sending them something every month (which from what I can tell 80% is going to interest. The principal has barely moved!

4. Settling the account will not help your score in the short term, but should stop the bleeding from Number 3.

5. Historically, Banks do not like outstanding "bad" debts and require them to be addressed (Paid off or settled) prior to doing a home loan.

THANK YOU!