Iceberg71

Will Paying Student Loan in Collections Help my FICO Score?

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I defaulted on a student loan held by Texas Guaranty. Their website offers a rehabilitation program to improve my credit. However, I see from my credit report that the loan was sold to the Regional Adjustment Bureau about nine months ago. Will paying down the loan now that it is with RAB improve my credit score, or do I simply need to wait 7 years for this to fall off my report?

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I defaulted on a student loan held by Texas Guaranty. Their website offers a rehabilitation program to improve my credit. However, I see from my credit report that the loan was sold to the Regional Adjustment Bureau about nine months ago. Will paying down the loan now that it is with RAB improve my credit score, or do I simply need to wait 7 years for this to fall off my report?

 

If this is a federally backed student loan it will not fall off your credit report in seven years.  In fact if it is a private loan in some cases those don't fall off either.  Student loans are the one debt that has the ability to hang around a LONG LONG time.  If you can get into a rehab program it will greatly improve your FICO score once you complete the rehab portion.  

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I think RAB is just a collection agency and not a JDB. As far as I can tell they just service the loans for the original creditors. 

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A JDB is a junk debt buyer. They buy bad loans for a little of nothing and try to collect on them. A regular collection agency is contracted by an original creditor to try and collect on an account. They get a commission when they get people to pay. I could be wrong but I'm guessing RAB is just a collection agency. Its not very common for student loans to be sold because of the "unlimited" time of collection. If you decide to pay on it I would try to deal directly with the original creditor. 

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@Iceberg71 - I was on TG's website - you might want to go there as I see they have information regarding loan defaults.  As previously mentioned, I would start with them first - don't contact CA - start with the OC first and try to work something out with them.

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@Iceberg71

Credit Report Rules

Federal law (US Code Title 15, §1681c) controls the behavior of credit reporting agencies (CRAs). The specific law is called the Fair Credit Reporting Act (FCRA).

  • Tax liens: 10 years if unpaid, or 7 years from the payment date
  • Bankruptcy: 10 years from the date of filing (15 U.S.C. §1681c)
  • Perkins student loans: Until paid in full (20 U.S.C. §1087cc©(3))
  • Direct and FFEL loans: 7 years from default or rehabilitation date (20 U.S.C. §1080a(f)(1) and 20 U.S.C. §1087e(a)(1))
  • Judgments: 7 years or the debtor’s state statute of limitations on judgments, whichever is longer

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