How much did I "F" my credit... (student loan related)

['Chair]

28k in student loans -- consolidated back in May06 w/ Citibank.
23-stafford (4.25%)
5-private (7.5%)

paid off the private loans after a few months...boy did that feel good.

2 weeks ago I received a letter saying I was 90days late on payments for some 10k Perkins Loan I had no idea about. So after some research and phone calls, found out it was true that I did have another loan. Well why the hell weren't these consolidated with the rest of my student loans when I told Citibank I wanted to consolidate everything with them???????????? no clue, <shrug>

Made the 4 months payments as well as the late fees and am caught up now.

So now I'm sitting at 32k student loans.
22-stafford (4.25%)
10-perkins (5%)

What is this going to do to my credit score? Had my mom run my credit (before the perkins went into repayment) and had a 710-740.


Lessons Learned
a. always be aware of your financial positions.
b. as a student, pay attention to your loans while you are in school. (my mom handled all of mine while I was in school...updated me every once an a while but I never cared...I was just aware that one day I would owe someone some money.)

[Thremp]

1) Complain to citibank.
2) I think you can get stuff removed from your credit report. But I'm not really sure. Might be worth looking into to see if it there at all.

Credit probably isn't that effed.

[Dazarath]

Maybe PM SossMan about this. He might know something you can do?

[IdealFugacity]

Hm, at my school we talked directly to the financial aid office about the Perkins loan before we graduated. "Exit interview"

Sucks that you didn't get the same treatment, sounds like...

[Brad1970]

It has been a few years since I was in college, but isn't a Perkins loan thru the government??? If that's the case, how do you expect Citibank to consolidate what it doesn't have any control over?? They probably did consolidate their loans...

The best way to figure out if you hurt your credit score is to get a copy of your credit report. Student loans are reported so it should show you being deliquent.

[Big Boiler Dawg]

You can get a free credit report once a year from all three major credit agencies. Here is the link:

www.annualcreditreport.com/

I pull a report from a different agency every four months.

Since you're young and naive, let me give you a little unsolicited advice: Pay off these stinking loans ASAP, and stay out of debt forever. The only debt you should ever take on is a mortgage on your home. You do not need credit cards to live, and you do not need to finance your car. Use only cash and a debit card.

I wish to God I would have received and accepted this advice when I was 22. Now at 44, I have $19K in credit card debt. I spent money I didn't have, on things I didn't need, to impress people I don't like. Don't make my mistake.

BTW, I have a plan in place to have this crap paid off in 2 years. Never again.

[AceLuby]

I don't think you can consolodate your Perkins loan, but you should look into that, so it may not be Citi's fault. However, it is weird that you never received any notification that you switched to repayment period. I would try to get someone on the phone and make sure everything is straight and explain your situation. This will only affect your credit score if they report it. If you calmly and politely speak w/ someone there is a decent possibility that it won't get reported.

[SossMan]

[ QUOTE ]
28k in student loans -- consolidated back in May06 w/ Citibank.
23-stafford (4.25%)
5-private (7.5%)

paid off the private loans after a few months...boy did that feel good.

2 weeks ago I received a letter saying I was 90days late on payments for some 10k Perkins Loan I had no idea about. So after some research and phone calls, found out it was true that I did have another loan. Well why the hell weren't these consolidated with the rest of my student loans when I told Citibank I wanted to consolidate everything with them???????????? no clue, <shrug>

Made the 4 months payments as well as the late fees and am caught up now.

So now I'm sitting at 32k student loans.
22-stafford (4.25%)
10-perkins (5%)

What is this going to do to my credit score? Had my mom run my credit (before the perkins went into repayment) and had a 710-740.


Lessons Learned
a. always be aware of your financial positions.
b. as a student, pay attention to your loans while you are in school. (my mom handled all of mine while I was in school...updated me every once an a while but I never cared...I was just aware that one day I would owe someone some money.)

[/ QUOTE ]

Get a free credit report from www.annualcreditreport.com . With student loans, you never know which, if any, of the bureaus they report to.
Find out if it's on there.

If there is derogetory information relating to this account, I would contact the loan servicer to try to get them to remove it. Given that they likely have no record of sending anything to you, and you have no prior history of missing payments with them or any other student loans, you might have a shot.

Student loans are odd, they don't always report on time or accurately, so you might be okay.

[emon87]

[ QUOTE ]
Since you're young and naive, let me give you a little unsolicited advice: Pay off these stinking loans ASAP, and stay out of debt forever. The only debt you should ever take on is a mortgage on your home. You do not need credit cards to live, and you do not need to finance your car. Use only cash and a debit card.

[/ QUOTE ]


This is pretty horrible advice.

The interest he is paying is so low that there is a very good chance he can make more in interest - taxes than he is paying in loan interest. He should NOT pay these off right away, for the same reason that one should not pay off a mortgage.

Also, there are a number of reasons why credit cards are a lot better and more secure than debit cards. These include much better security and usually better rewards.

[Big Boiler Dawg]

[ QUOTE ]
This is pretty horrible advice.

[/ QUOTE ]

On the contrary, I believe it is excellent advice. Any arbitrage in interest rate differences is negated by the additional risk incurred by possesing these loans. Paying off the loans is risk-free.

What if he loses his job, or becomes disabled? I know that we think we're invincible at 22, but things like that can and do happen.

The comparison to a mortgage is flawed. Student loans are not secured by any collateral, and they cannot be discharged by bankruptcy. They stay with you forever, untill they are paid off. And BTW, why is it not a good idea to pay off a mortgage? Sure, you MIGHT be able to make more money on other investments, but again, that means taking on additional risk. If my mortgage was paid off, I could probably make ends meet by delivering pizzas and playing the $10 NL tables.

As for "rewards" credit cards, if you let a balance revolve a few times, that'll pretty much eat up any rewards. Play with fire, and you're likely to get burned. These credit card companies know what they're doing.

Finally, my debit card through ING Direct is 100% guarenteed against theft and fraud, totally secure. And speaking of security, there's nothing more secure than a repaid loan.