Radtastic Credit Repair

All righty… First of all I’m 21 and im distraught because of the debts i owe due to my naiivety of finances when i left my parents home to start college.
 
Well i ended up dropping out 10 weeks into college and have a $2500 student loan thru Sallie Mae My account status says: Claim filed with government/Past due 180 days.  :S

i have been going thru a bout of unemployment and am about to start working again.  i have no idea what “claim filed with government” means and the consequences therefore associated. 

I am just learning about credit and credit scores. i need help in figuring out what the best thing for me to do to get this mess cleaned up and my score polished a bit. im currently trying to apply for a $4000 loan to pay the collection fees owed to the Michigan Department of Treasury for my Driver’s Responsibility fee which is $3055.
i need to drive to work!  Eeeep!

any advice you can give me on all the above written would be RADTASTIC!  Thankxz!

Tom

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Hello Tom,

Federal education loans are guaranteed and/or insured by the federal government; if you don’t make the payments, a claim is filed with the government.   There is no statute of limitations for collectability of student loans and they are generally not dischargeable in a bankruptcy. In other words, you must pay your student loans back one way or the other. 

The good news is you can rehabilitate a student loan with nine on-time payments.  Additionally, student loan payments must be ‘reasonable and affordable’.  Once you are back to work, contact your student loan lender and request a payment plan that is ‘reasonable and affordable’.

You may find that it is easier to qualify for a loan after you have established three active and open tradelines.  Secured credit cards are an excellent means of accomplishing that. 

In sum, after nine months of payments on the student loans, the default status will be removed and you could have over six months established on three secured credit cards.  At that time, your credit score will not be radtastic, but you will have a much easier time gaining loan approval for unsecured credit, car loan, etc.  Hopefully, you can tough it out until then.

Thanks for the question and hope this helps.

Paul