charge-off affecting eligibility for fed loans?

[vinganca]

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I've got a charge-off on one of my credit reports. I'm doing what I can to resolve it (trying for a PFD agreement), but I'm worried about it affecting my ability to get Grad PLUS loans.

If I pay the account and the status is changed to "paid after charged off", does that make a difference? What about having a cosigner?

Anyone with negative accounts on their credit who can give me any advice re: loans?

 

[kwsvtcobra]

it will look a little better if it is paid but not much. It will still show as a "charge-off paid"

 

[vinganca]

I know that. 🙂 What I'm asking is, will that prevent me from getting federal (specifically Grad PLUS) loans? And if so, would it be possible to get over that by having a creditworthy co-signer?

 

[WhoisJohnGalt]

I know that. 🙂 What I'm asking is, will that prevent me from getting federal (specifically Grad PLUS) loans? And if so, would it be possible to get over that by having a creditworthy co-signer?

It shouldn't. I have one and all my grad PLUS lender cared about was that it was paid (ie I didn't have any outstanding collections or charge offs). I did need a manual override as the computer automatically declined me but the override was quick and painless. Alternative loans are a different story though-- if you need one of those you will likely need a cosigner. Good luck!

 

[nontrdgsbuiucmd]

It shouldn't. I have one and all my grad PLUS lender cared about was that it was paid (ie I didn't have any outstanding collections or charge offs). I did need a manual override as the computer automatically declined me but the override was quick and painless. Alternative loans are a different story though-- if you need one of those you will likely need a cosigner. Good luck!

I had chargeoffs, and around 4 yrs later (now) did not need any type of override to qualify for grad plus loans, current credit score is 700+ which maybe helped? I strongly doubt that paying off a charged off debt is good. I was told that for some debt, the "date of most recent activity" will change to the date you made the last payment; if an amount was charged off 4 yrs ago & I made a payment now, that would make it worse for anyone viewing my credit report; let sleeping dogs lie

 

[WhoisJohnGalt]

I strongly doubt that paying off a charged off debt is good. I was told that for some debt, the "date of most recent activity" will change to the date you made the last payment; if an amount was charged off 4 yrs ago & I made a payment now, that would make it worse for anyone viewing my credit report; let sleeping dogs lie

In general, you're absolutely right. In terms of my credit score, it certainly doesn't help to pay a charged off debt. But, my lender required that it be paid for the manual override. You probably used a different lender, and I'm sure the requirements are all slightly different.