Hi,
I have a 8 of student loans which were charged off in Jan, 2010 due to unemployment and my inability to pay them at the time. Since the charge offs, I am now working a well-paying full-time job and have entered repayment agreements with each loan where I pay a set amount each month by a certain date, so they are identical to any other installment agreement.
The lender claims that they will continue to report these loans as "charged off" until the loans are paid in full. Due to the large amount of these loans they won't get paid off before 9-10 years.
Would the lender continuing to report the loans as "charged off" be accurate under these circumstances? Can I force them to add anything in addition to note that the loans are in repayment so this repayment status will be reflected on my credit report? If you look at my report now, it appears that the loans are just sitting idle.
Paying charged off student loans
Hi Rayne,
Yes, this is true that charge-offs can only be removed once you pay off the debt. I am afraid it won't be possible to report nay other status against these accounts before you pay off the dues. With time the negative impact of the charge-off decreases. So, you need not worry much about this.
You should rather try to improve your credit by maintaining payment son other accounts. You can also take a secured card, and make small purchases using the card. Then if you make on time payments on these, your credit will improve.
You can also get added as an authorized user on some friend or relatives account who has a great credit score. This definitely is going to improve your credit score. If you can show good credit history inspite of the charge-offs, you may qualify for loan and new credit cards in the future.
Thanks,
Aaron