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Julie
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Subject: Student Loans
 
Posted on Mon Mar 15, 2010 8:08 pm  

If you enter a credit assistance agreement for credit cards, will you be eligible for student loans? For example, I have heard that credit counseling (obviously) carries with it the promise that you won't incur any debt that is unsecured. Does this include student loans? My son is in college and I don't want to compromise his education.
NightStar



Joined: 10 Mar 2010
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3141 Magic Points

 
Posted on Tue Mar 16, 2010 2:02 am  

That is a very very good question, which unfortunately I don't have the answer for.

Best thing to do is call the credit counseling company and ask them if this restricts you form obtaining student loans - they would be the ones to ask.

I would think that a student loan would be different then credit, it might just be exempt in this case.

If you find the answer I would like it if you posted back what you found out.
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Aaron

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Joined: 08 Feb 2010
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Subject: credit counseling
 
Posted on Tue Mar 16, 2010 7:00 am  

Hi Julie,

Credit counseling helps you to manage your credit problems, and educates you on how to handle credit, so that you don't get into any credit related problem in the future. It provides you with information on how to avoid incurring huge debts. Going in for a credit counseling can hurt your score, because when you opt for credit counseling, you stop your payments to the creditor. However, after the counseling program you have chances to improve your credit.

As far as I understand, credit counseling doesn't forbid you from taking a student loan. However, credit counseling helps you in handling student loans too.

Hope this helps.

Regards,

Aaron
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fireyone



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Posted on Tue Mar 16, 2010 11:50 am  

Aaron, Is it possible to go in for counseling and still continue to pay the creditors? I was wondering if a person felt they needed the counseling but was still able (even if barely) to pay their debts..then why not just pay them. Does signing up for the counseling lower your score if you continue to pay?
cinnamngrl



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Posted on Wed Mar 17, 2010 2:31 pm  

Being eligible for student loans has to do with your current credit score. being in credit counseling can affect your credit score.

One big factor is whether you have defaulted on any other government guaranteed loans.
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NightStar



Joined: 10 Mar 2010
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Posted on Wed Mar 17, 2010 9:42 pm  

Credit Counseling does not affect the credit score at all. All that is happening there is that the CCCS made a reduced interest agreement with the creditor to help the consumer pay off at a reasonable amount each month and manage to get the debt down.

The creditor will update their account listing to say that the consumer is in credit counseling, but this does not hurt the score.

What it does hurt is other lenders viewing the credit report, it will be a red flag to them.

A consumer is not allowed to apply for any new credit while on CCCS, and they are even required to close all of the accounts included in CCCS.

Once all of the accounts are paid, they can get the CCCS note removed off of the paid account with the creditor.

CCCS is viewed as if the consumer had filed chapter 13 bankruptcy. But unlike bankruptcy their is no public record entered, and it can be off of the report in less than 7 years.
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vfsalinas05



Joined: 24 Jun 2010
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Subject: student loans
 
Posted on Sat Jul 03, 2010 1:43 am  

My biggest black mark on my credit report would be the student loan that I defaulted on. I entered a loan rehabilitation program in which when I finish paying it off they will remove everything from my credit "as if it never happened". (of course I got this in writing, I almost want to frame the letter = )... ) I cannot wait for this loan rehab program to be over and done with so it will boost my credit score...because of this I did not qualify in getting a home loan...
NightStar



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Posted on Fri Jul 09, 2010 10:04 pm  

You say a student loan collection company assured you they would remove in exchange for payment, that is rare, frame that letter. lol

Anyway, student loans are very important debt, hands down you just got to pay them, cause they can just get money other ways out of you like garnishment of taxes.

But mortgage companies can work with people, even with bad credit, but I strongly recommend not getting one now until you clean up your credit first. It is far better to go into mortgage at prime rate verses sub-prime. You would be saving yourself 10's of thousands of dollars for sure.
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sdchargers_63

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Subject: credit
 
Posted on Sat Jul 10, 2010 10:59 am  

Years ago, I had a Student loan in 'deafault'. It took the ACT of GOD (..or close to it..LOL) to bring the loan 'up to date', so,..it was showing 'postive' on my CR again. It took alot of phone calls and paperwork. I've put it into 'deferrment' a few times (yep..% DID grow on it..) but, it was still 'positive'. It didn't just 'go away'...it was (and still is) reporting 'positive'. It's taking al ong time to pay off, but, at least it's out of 'default'.
Barbara_Elena
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Subject: Student loan.
 
Posted on Sat Jul 10, 2010 11:53 am  

You did not mention whether the defaulted student loan is there even after 7 years. If you have paid in full, the defaulted student loan, the default is still going to show on your credit report for 7 years. However, your credit report is going to reflect a zero balance after you have paid your defaulted student loan.
sdchargers_63

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1916 Magic Points

Subject: credit
 
Posted on Sat Jul 10, 2010 10:01 pm  

When my Student loan was in 'deafault', it was never on my CR. I was told the loan had to be in 'default' for a certain amount of time, before it was reported to the CB's.
vfsalinas05



Joined: 24 Jun 2010
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999 Magic Points

Subject: student loans
 
Posted on Sun Jul 11, 2010 3:25 am  

I'm not sure how long I had been in default for my student loan...I was very naive and made alot of mistakes a few years ago..I don't think I checked my credit for many years until just recently....I am paying so many bills now that I never paid, i'm in the long haul to fix my credit and get a home loan...Almost there! = )
NightStar



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Posted on Sun Jul 11, 2010 5:38 pm  

I didn't look back to see if I addressed reporting times,

Student loans, once defaulted, can remain on the credit report indefinitely just like a tax lien, but instead of one account listing, it will be subsequent collection agencies selling over the years and just re-populating the account on the credit report.

They the student loan companies, or collection agency have a need to file judgments on these, since there is NO statute of limitations, no need to convert a judgment to a lien, since it is the same thing. Defaulted student loans can not be discharged in bankruptcy if they are federal loans.

Even in deferment, student loans will show on the credit report, so you go lucky that yours didn't. I use to work for a credit bureau and I would investigate and update credit reports on our own format called a Residential Mortgage Credit Report (RMCR) for banks and credit unions, oh and mortgage companies processing mortgage loans, and it was my job to pick through all accounts and verify balance and status. I could go into more detail on that subject, but my point is many people do have deferred accounts showing.

Negative accounts usually expire 7 years after the creditor listing ws defaulted on, if it was made positive, then good accounts show 10 years on the credit report.

Oh and if you ever ever apply for these 3 things:

employment exceeding $75,000
insurance exceeding $150,000
mortgage exceeding $150,000

Then the credit reporting agency will issue a FULL credit report, not the short once that consumers only see with the 7 year expiration. The long reports show ALL history, from clear back when you first started using credit.
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cccfree



Joined: 14 Apr 2011
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Posted on Thu Apr 14, 2011 11:57 pm  

I agree that credit counseling isn't going to effect your son's student loans, it only applies to your unsecured credit card debt.
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