Are you having student loan problems? Well, you’re not alone. As of 2020, around 45 million Americans collectively owe $1.56 trillion US Dollars in student loan debts. Yes, that’s definitely a lot of money making student loans the second highest consumer debt in the United States, behind only mortgage debt. The more alarming fact is that more than 10% of these student loan borrowers are delinquent in their payments or have defaulted in their loans.
If your student loan dropped your credit score or you’re wondering how to remove old student loans from your credit report, you’re probably here looking for answers whether it is even remotely possible to have these student loans taken off your credit report. Student loan entries stay in your credit report for 7 long years. Should you just wait it out or is there a way to remove student loans earlier, especially old ones?
Can You Get a Student Loan Off Your Credit Report Before 7 Years?
When Can I Dispute a Negative Student Loan Entry on my Credit Report?
If you believe that the negative student loan entry in your credit history was reported incorrectly, you can dispute this entry as part of your rights under the Fair Credit Reporting Act. There are instances when your student loan might have been mistakenly placed in default so you can dispute this. Doing so will improve your credit score.
Here are some scenarios that allows you to dispute the student loan placed in default on your credit report:
Steps on How to Get a Student Loan Off Your Credit Report Due to Inaccuracies
If you are planning to file a dispute to have incorrect student loan entries removed from your credit report, you can follow the steps outlined below. Take note that filing a dispute is not a guarantee that the entry will be removed, however, it is still worth a shot as the loan servicer or the credit bureau could find after the investigation that your claim is valid.
Step 1: Request for a Free Credit Report from the Three Major Credit Bureaus
If you want to file a dispute, it’s important that you have the latest copy of your credit report. Don’t worry because you don’t need to pay anything to have this copy because you are entitled to one free copy every year from TransUnion, Experian and Equifax- the three major credit reporting bureaus. Until April 2021, you can even get a free weekly credit report so you can better monitor your financial health.
For you to request a free copy of your credit report, visit annualcreditreport.com.
If you do not have internet access, you can also call by phone: 1-877-322-8228
Step 2: Check for Inaccuracies
When you get a copy of your credit report, review it carefully and check for inaccuracies. Look for the student loan entries and see whether there are mistakes in there. While you’re at it, it’s worth checking the report entirely for other mistakes as well. It is possible that mistakes will only be on one and not all three credit reports.
Some common mistakes that you can look for include the following:
- Misspelled names
- Incorrect home address, birth date, Social Security Number
- Incorrect entries due to identity theft or fraud
- Duplicate accounts
- Outdated entries
- Incorrect payment history
Step 3: Send a Dispute Letter to the Credit Bureaus and Information Provider
When filing a dispute, you can go two different routes. You can file a dispute to the credit bureau or you can file a dispute with the loan servicer. If you file a dispute with the loan servicer and your request was not granted, you can try filing the dispute directly to the credit bureaus and vice versa.
Filing a Dispute with the Loan Servicer
To file credit with the loan servicer, you can look up their information on their company website. If you cannot find this info, call the credit bureau to get this information from them. Once you have the contact details, send a dispute letter either online or via mail. Don’t forget to enclose proof or evidence if available to support your claim. Otherwise, you can also ask them to furnish the evidence if you’re contesting whether the student entry is yours in the first place.
You can use this template provided by the Federal Trade Commission:
Filing a Dispute with the Credit Bureaus
It is also possible to file a dispute directly with the credit bureaus on which the student loan entries appear. You can file a dispute online or via mail. To file a dispute online you have to go to the dispute page, create an account, and follow the procedures provided by the credit bureaus.
If you want to send a physical mail. You can send it to the following addresses below:
- Experian Dispute Department
P.O. Box 4500
Allen, TX 75013
- TransUnion Consumer Solutions
P.O. Box 2000
Chester, PA 19016-2000
- Equifax Information Services LLC
P.O. Box 740256
Atlanta, GA 30374-0256
Here is a sample letter that you can use as a template provided by the FTC.
The dispute process will take at least 30 days so you have to wait for that period to see whether your complaint was resolved. You should get a confirmation from the credit bureau, if not, you could follow up. You have to wait the next month to request for another copy of your credit report to see if the change is already reflected as it may take about 4 weeks for the information to be updated.
What if my Student Loan was Verified as Accurate? Can I Still Have it Removed?
If your complaint was accepted, there is a possibility that your student loan entry will be corrected or even deleted from your credit report. However, if the entry was verified accurate, it will stay put on your credit report until the 7 years are through. This is obviously unfortunate for you because having a student loan in default on your credit report can hurt your credit score.
The good news is that while you cannot completely remove the student loan off your credit report, there are ways that you can try to remove the default status on your student loan. If you’re concerned about improving your credit score, the student loan itself is not the main problem. In fact, a good payment history will actually help your credit. However, if you have a student loan in default or you have missed payments, these mistakes are what’s really hurting your score. To improve your score, what you want to happen is to remove the default status or late payments from your student loans to improve your credit report.
If you have already tried sending a dispute and failed, here are some other options that you could try out to get your student loans out of default or remove late payments off your credit report.
Option 1: Send a Goodwill Letter
Let’s say you’ve been paying your student loans regularly but a financial hardship caused you to miss a few payments. Now, you have been regularly paying your student loans but those late payment entries on your credit report are still there hounding you.
What you could do in this scenario is try to send a goodwill letter to your lender. This letter is an emotional appeal for the lender to remove those late payment entries. For this to work, you have to tell a convincing story of what happened during that time, accept responsibility, and also illustrate how you are a good borrower except during that specific period. If you are still in default, or have not paid your debts, this might not work.
Option 2: Apply for Student Loan Rehabilitation
A student loan rehabilitation could be your one chance to get out of default without hurting your credit score. If you have a federal student loan, you could apply for a rehabilitation program wherein the default status will be permanently removed from your credit report after 10 consecutive months of good payment behavior.
The good news is that the amount you will pay will depend on your income and will be determined by the loan holder. Some borrowers who have gone under student loan rehabilitation reportedly paid as low as $5 a month during the 10-month period.
Option 3: Check if You’re Eligible for Student Loan Forgiveness
Just because your loan is off your credit report after 7 years does not mean it disappeared completely and you are not required to pay it anymore. If you have an old student loan and have made considerable payments towards it, you can check whether you are eligible to apply for student loan forgiveness. When your student loan is forgiven, canceled, or discharged, it means you won’t need to pay it anymore. Go to the Student Aid Website to learn more about student loan forgiveness.
Option 4: Pay Off the Loan
Paying off the money you owe if funds are available is obviously one of the surest ways to get the loan out of default. This option is not, however, as easy as it sounds with most people struggling to make payments every month.
Don’t Ignore Your Student Loans
If you have student loans and you’re late on your payments, it is better to deal with the problem head on rather than ignoring it. The longer you put it on hold, the impact will be worse. Look for options like student loan rehabilitation or consolidation to get your finances back on track.