Q:
Hello, We are at our wits’ end about what to do with Sallie Mae and my husband’s student loans. He never defaulted but was delinquent for a good amount of time. Since we started our house hunt (over 2 years now and not able to get anything) we have done consolidation , lowered our payments to something we can afford and have been current for over a year now. The delinquency still shows up on all 10 accounts on his credit report. We have spent many hours on the phone trying to get an answer as to why nothing is upgraded on the credit report , not even to show we consolidated. They never give us an answer. They say it’s the credit bureaus’ fault. Because of this his credit score is too low to qualify us for an FHA loan and we are getting desperate about not being able to get a home and having to shell out $1000 in rent every month.Any tips/help/information would be greatly appreciated it.
Thank you, Ana Ortiz
A:
Hi Ana,
I see how this could be frustrating. It is very typical for debt consolidation companies to blame the credit bureau for not showing what debts are in debt consolidated. I personally don’t see any advantage in them showing anything is in debt consolidation. I would not worry about that, typically what you need to worry about is them paying your creditors late. This is very common with debt consolidation companies.
The previous late payments will be on your credit report for seven years from late payment date. So you will have to wait seven years before that is removed. In order to get your credit scores up, I hope you have other credit on your credit report. Typically you need a couple of credit cards along with other types of credit. You also need to make your credit balances well below your allowed credit limit. This needs to be at least 20% of the allowed credit limit. If its higher, you will be considered a credit risk, which will lower your overall credit rating. Here is a good article we wrote, and it discusses what determines your credit score. You might need to work on other ares to increase your husbands score.
I hope this helps,and gets you in the correct direction. Its hard to say exactly what the issue without looking at your credit report.
Mike Clover
CreditScoreQuick.com
