I wasn't really sure where to post this. I've read several threads regarding how a student loan default appears on our credit reports, but here's my question. How does it effect the credit score / future lending opportunities? 

Same story as always - got into hard times, couldn't pay it, etc. I picked and chose which debts to pay and which not to pay at the time. Fortunately, my situation is now 1000 times better. The only two credit accounts that fell behind was my Visa card, which was an R6 and is now reporting as an R1 as per my deal with them (yay!), and my student loan which sadly, defaulted. They had declined my request for interest only / deferred payments back in 2011. Apparently I made too much money, without them considering my unique situation. Regardless, I am here now.

My loan is showing as "paid as agreed and up to date" and "transferred or sold". The last activity on it was in June 2012 as 120 days past due.

My confusion is this... no one has contacted me once trying to collect this. Last year, because I was behind on the payments, they withheld my income tax return - fine. But that's it. Nothing else. 

Second - how does this actually affect me?? It's reporting as I1 - will this hurt my application for credit? I'm looking at approaching Scotiabank, my bank, for a line of credit to cover other debts and basically consolidate everything with them. But the student loan is bothering me. I don't know what to do / say.

My current credit situation:

Scotiabank Dealer Finance Loan: Balance 19,000 / Opening balance: 33,000 / NO late payments. Ever.

Visa Desjardins: Balance 3000 / 4000 limit - was 120 days, R6 - but has been rehabilitated to R1 and late payments removed.

Line of Credit with Desjardins: balance: 3900 / limit: 5000 - 2 30 day late payments in 2010 - tried to dispute with them, hate them for it (reason why I switched to Scotiabank then) and they won't remove them.

Would it even be worth my time to go to Scotiabank and request a balance transfer to their visa and line of credit? Bah idk what to do! lol

The good news is that the script rating is not derrogatory (I9), which means bad debt write-off (DWO), skip/unable to locate, referred to collections. Creditors don't want to see any of these remarks.

 

If you are approaching Scotiabank for a scotialine or similar product they will check your background. They were a student loan supplier during the first generation program (risk-shared), and they do know what things mean and how to interpret, of course.

 

It is 6 and 1/2 dozen of the other here really. On the plus side you have established a decent relationship with Scotiabank. That relationship may carry you through without incident. 

 

Moral 101: Apply and don't lie. If you get caught in deceptive act then the relationship you have worked hard to establish with them is toast.  They may not question you at all.

 

Advice: work with the program to pay them and develop a decent relationship with the Feds. Then you have a GOOD repsonse in the event someone that youa re depending on for credit privileges asks you about it in the future!

 

 

 

Thank you for the advice!