Six year old delinquency early removal?
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I have an old student loan that went 90+ late 6 years ago. I paid off completely in one payment about 4 years ago, but the 90+ late status still appears on my credit report and is pulling my score down possibly 20 – 30 points.
I’m currently looking into buying a house, so naturally I want this off my report. I sent a goodwill letter to the US. Dept of Education, but they replied that they have no record of this loan in the system anymore and therefore can do nothing to help me.
What do I do next?
Dispute it with the credit bureaus!
This is a classic case where disputing the account can help. The credit bureaus must remove any account that is not yours or can no longer be verified!
When you dispute an account, the credit bureaus contact the lender. If the lender cannot confirm your account status, the credit bureaus must remove it from your credit report.
You’ll need to dispute it with all three bureaus.
Good luck
Disputing can sometimes be a double-edge sword!
If you have a long payment history on this account or 2 or 3 years or longer and had only one 90+ day late payment during the course of the loan, then removing the account from your credit report can actually LOWER your score!
Payment history (length of payment history specifically) is a key component in your FICO score. I’ve seen instances where people have successfully disputed and managed to delete a charged-off account or vehicle repossession where they had 3-4 years of great payment history prior to that delinquency – and their FICO has dropped 40 or 50 points or more!
You are better off with a long payment history plus one old delinquency than without the account. In any case, most mortgage companies allow you to write a “letter of explanation” to the underwriter giving your account of what happened.
BTW, you’re in the top 10% of people in this category, because most people NEVER pay off delinquent accounts. The fact that the loan was paid in full w/o it going to collection or having a court issue a judgment will stand up for you when the mortgage company considers your application.
In fact, I’ve never seen anyone get denied for having 2 or 3 late payments on an account UNLESS it’s a mortgage account.
If you have a good mortgage broker or loan officer he should have access to a software tool called CreditXpert. This tool allows you to simulate how your score will change w/o that one late payment. I doubt it will have much impact’ if any. You can also try this FICO Score Estimator, powered by FICO®.
Finally, if your lender or bank is telling you that the loan ill be denied because of this one account – simply find another lender!
Good luck!
It’s not what pulling your score
It’s doubtful that this 90+ late payment is having that much of an impact on your credit score, because it is very old. The older it is – the less impact it has on your score.
I had a 5 year old car repossession deleted, with only 9 points increase. You need to look at other factors like credit card debt ratios. If you owe more than 35% of the limit, you would be better off paying them down below 35% than worrying about a 6 year old late payment.
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