Hi Steve, I just recently settled on my private student loan for less than the total amount that I owe simply because I didn’t want to risk getting sued. The total amount was about $25,000.00. I currently have 4 credit cards, a car loan and 1 personal loan. 3 of my credit cards and personal loan are fairly new (opened this year, 2012),the other credit card was opened in 2005 and car loan in 2008 and never had any late payments. All of these accounts, I never made a late payment, always paid them on time. Although my credit score is poor due to delinquencies and collection accounts in the past.
I just want to know since I settled on my student loan and my credit score is going to drop because of that, how long will it take to bring my credit score back up? Will my good behavior on my other accounts help at all and how soon? Do you know by how much points my credit score will drop by settling a 2 year old student loan debt that was in collection?
Closing open collection items and the current reporting of positive credit use is the best way to rebuild your credit score.
It sounds like you are doing the right things.
Can you tell me more about the settlement? I’d like to know how much you owed, how much you settled for and who the lender was.
My only suggestion is that you should review your consolidated credit report to make sure the old negative items have been addressed.
Please post your responses and follow-up messages to me on this in the comments section below.