We’re kicking things off here on a sour note… contrary to what you may have heard, you cannot remove student loans from credit reports if the information is accurate — Sorry about that.
But did you know that student loans aren’t necessarily a bad thing on your credit report? In fact, you should think of them as one of your most valued weapons in your credit score-boosting arsenal.
Of course, they’re not always a force for good, but there are a few tips and tricks you can use to remove specific negative student loan details from your report, or, better yet, prevent them from landing on there in the first place. Here’s how it all works!
Removing Negative Student Loan Information From Your Credit Report
We’ll preface this section by mentioning that you can only get erroneous information discarded from your credit report. If the negative information is correct, there is no way to legally remove it.
If someone or a business offers this service to you, be warned — It’s likely either a scam or liable to get you in BIG trouble.
With that out the way, let’s get the ball rolling with some of the specific pieces of information that you might be able to remove:
- False late payments
- Any loans that belong to someone else
- Any and all negative details pertaining to a student loan in forbearance or deferment
- False default status — Of all the credit score drains on this list, a false default status is the most damaging, and can happen for a number of reasons. For instance, you may have made all your payments on time, but due to some form of clerical error, the funds have gone uncounted or maybe even applied to an incorrect loan.
Should any of these discrepancies have an impact on your credit report, we’d recommend contacting the loan provider immediately to get things straightened out. But before you go in all guns blazing, you’ll need to gather all the evidence that proves your claims.
Contacting Your Loan Provider
If you notice some wrongful student loan info on your credit report, you might feel better contacting your lender immediately by phone, ensuring they at least are aware of some issues with the reporting.
However, although you may be able to get some kinks hammered out by phone, most of the heavy lifting is done in writing, so as soon as you hang up, you should compose a dispute letter.
Not only will this give you an opportunity to state your case in a measured and erudite manner, it leaves a dated paper trail of your claim, which should make follow-up inquiries much easier.
What Should A Dispute Letter Contain?
You have plenty of creative freedom when it comes to the composition of your dispute letter, but however you choose to express yourself, it must contain the following:
- Your student loan reference number
- Your contact information — Play it safe by offering up your number, email, and address.
- A lucid account of the problem, with reference to proof of the problem’s existence, i.e. a credit report and previous documents sent to you by the lender.
- Evidence that your claims are substantiated. This could take the form of repayment records or the original loan agreement.
- What you wish to happen, i.e. the removal of the erroneous information from your file.
- A request that the lender responds with written confirmation that they, a. Have received and read the letter, and b. That the errors have been rectified, and the appropriate credit bureaus have been notified about your change in status.
Typically, the lender will know which bureaus to contact, but just to be safe, it’s best that you state in no uncertain terms that you wish for them to give notice of your status change to the three major US credit bureaus:
- Experian
- Equifax
- TransUnion
Once notified, these pillars of the credit system will amend their records to match those of the lender.
Sending & Follow Up
It’s essential that you send your dispute letter with a certified mail service and request a return receipt. Allow 2 weeks for the mail to be delivered and processed then follow up with the company if you haven’t heard back from them.
Once the lender has confirmed that your records are to be amended, wait 30 days then pull your credit report to check the amends have been actioned.
Filing An Account Dispute
Should there be no change in the details, contact the lender again to check if they have caught up with the bureaus.
Whether they have or haven’t, your next move should be to reach out to the credit bureaus yourself, and the best way to expedite the amends process is to file an account dispute with each one.
The bureaus have a legal obligation to investigate your dispute within 30 days of receiving it.
Reversing Default Status
If the borrowed amount is a federal loan, you may be able to reverse a default status by contacting the lender and renegotiating repayment terms, thereby rehabilitating the loan, meaning it won’t be registered as default on your credit report.
Bear in mind, though, that to snag this reversal, you’ll need to pay at least 9 of 10 consecutive payments on time in accordance with the new repayment plan.
Sadly, this isn’t an option for those with private loans, but you may have some luck refinancing the defaulted loan with another lender.
Forgiven Debt
You might qualify for student loan “forgiveness”! There are certain qualification factors that will apply but it’s worth a try. You can get up to $20,000 in debt canceled according to the U.S. Department of education.
Another possible eventuality of a federal loan is having residual debt “forgiven” as reward for 10 years of public service either in a government agency or government-approved nonprofit.
That said, not all federal loans have this nifty get-out clause, so be sure to read the fine print of your loan agreement before relying on it.
Furthermore, this is a conditional out, meaning that all your payments up until the 10-year mark must have been made on time and in full.
Final Thoughts
Repaying student debt can be difficult, and it’s becoming more of a challenge with each passing year, but do your best to keep on top of things, and rest assured that if there are any incorrect student loan details on your credit report, they can be amended!
As a current Mortgage Underwriter with 15 years of experience, I have seen my fair share of money-related issues. Whether that be high levels of debt, not enough credit, or simply a lack of funds - I’ve had clients who fit into these categories.
Here I will share tips, tricks, and experiences on how you can get yourself back in control of your finances.
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