How to Get Student Loans Off Your Credit Report: What You Can Do
Student loans can negatively impact your credit score, so you may think removing them from your credit report is the answer.
Contributing Writer at Tally
July 14, 2022
When you attend college, you can expect to pay tens of thousands of dollars to earn your degree. In most cases, you’ll need student loans to pay the cost of attendance. Student loans come in two primary forms: federal student aid and private student loans.
Regardless of the loan type, these student loans and their payment histories will eventually show on your credit reports. And since these are debts, they can hurt your FICO Score. However, their impact varies based on other information on your credit report.
For borrowers who want to know how to get student loans off, credit report protocols are important to understand. Below, we’ll discuss when this is possible and how to achieve it.
When do student loans hit your credit report?
Borrowers can take out federal or private student loans. The general rule of thumb is to take out as many federal student loans as you can before resorting to private loans. Plus, there are several federal student loan options—most student borrowers will opt for either a Direct Subsidized Loan or Direct Unsubsidized Loan.
Suppose you took out a federal student loan, such as a Direct Subsidized Loan or Direct Unsubsidized Loan. In that case, the servicer — the company managing your loan — can report the loan and its amount to the three major credit bureaus (i.e., TransUnion, Experian and Equifax) immediately. This means the student loan account can show up on your report the day you open it.
However, if you’re in a deferment — a payment freeze when no interest accrues — because you’re still in school or within the six-month grace period after leaving school, the loan may have “deferred” listed next to it. The same goes if the loan is in forbearance — a payment freeze when interest will accrue.
If you took out private student loans, they would follow the same rules of initial reporting as a federal loan. The private lender can report your loan opening to the credit bureaus the moment you open the new account. Like a federal loan servicer, if a private lender offers forbearance or deferment, and you use this service, it will appear as such on your credit history.
How to get student loans off your credit report
Many people who are concerned with their credit history are curious about how to get student loans off. However, if the information on your student loan is accurate and legitimate, there is nothing you can do to get the student loans removed from your credit report. Credit report errors are the most common reason for removing accounts from your credit history. However, if there is inaccurate information or the loan is not legitimate — potentially due to identity theft or forgery — you may be able to delete it from your credit report in several ways.
File a dispute with the credit bureaus
If you see an illegitimate student loan account on your credit report, you can dispute it. All three credit reporting agencies offer online systems that allow you to quickly dispute accounts and other info on your credit report.
Simply gather all the proof the loan is illegitimate, navigate to Experian, Equifax or TransUnion’s online dispute system, and follow the online guidance to dispute the account. At that point, the bureau will begin its investigation, giving the loan servicer or lender a specific amount of time to prove the loan is yours.
If the investigation determines the loan is illegitimate, it could be removed from your credit report or adjusted to make the reporting accurate. If the lender proves the loan is legitimate, the student loan will remain on your credit report.
File for loan discharge based on forgery
There is also a process for how to get student loans off credit reports if they are illegitimate due to forgery or identity theft. Federal student loans have a loan discharge process specifically for these cases.
To determine your eligibility for this discharge, complete the U.S. Department of Education’s Loan Discharge Form: Forgery Form. You then submit the form to your loan servicer for processing. Contact your servicer for specifics on where to send the loan forgiveness form and the preferred submission method.
If the lender finds in your favor, the remaining loan balance will be discharged, and you’ll receive a refund for all payments made. Once the remaining loan amount is discharged, the loan and any inaccuracies or negative information related to the student loan debt will no longer appear on your credit report.
When do late student loan payments hit your credit report?
When you run behind on your student loan payments, there is some relief, such as forbearance for financial hardship, if you have a federal student loan. Federal loans can incur a 6% late fee after the payment is 30 days late. For example, if you have a $100-per-month student loan payment that runs 30 days late, you’ll incur a $6 late fee.
Once your account reaches 90 days late, the loan servicer can report the 90-day late payment to the credit bureaus. Because your payment history makes up 35% of your FICO credit score, this can cause a significant score drop. The lender can continue to report your loan late every 30 days.
After reaching 270 days of not paying your student loans, they will enter default, which leads to the lender making the entire balance due immediately, as well as more penalties, additional collection fees and potential wage garnishment or seizure of income tax return checks.
As for private student loans, the servicer can report the late payment after a payment is 30 days late. From there, the lender will have its own collection and legal processes. However, in many cases, the lender will place your account with a collection agency after it’s 120 days late. After that, the lender can also sue you for wage garnishment, though it cannot tap into your income tax returns.
How to get late student loan payments off a credit report
If late payments have you wondering how to get student loans off, credit report disputes may be an option. Like illegitimate student loan accounts, you can also dispute any late payment reports your student loan servicers or lenders submitted to the credit bureaus. Collect all the proof that you made an on-time payment and submit the dispute to each affected credit bureau as instructed above.
If the investigation finds you did pay on time, the late mark on your credit report will be cleared. If the lender proves you were late, the mark will remain.
How to get a loan default off your credit report
If your Federal Direct Student Loan or Federal Family Education Loan (FFEL) went into default, you’ll not only have missed payments on your credit report, but you’ll also have a default reported. The latter can significantly impact your credit report for up to seven years.
Fortunately, if you apply for and complete the loan rehabilitation program — a regimented repayment plan that brings the loan up to date — the lender will remove the default status from your credit report. The late monthly payments will remain on your report for up to seven years, though.
You can also perform a federal loan consolidation to bring the defaulted student loan back into good standing, but this plan doesn’t include removing the default from your credit report.
You may be able to get student loans off your credit report
Student loans increase your debt, which can impact your credit score and your ability to secure financing. This can lead some borrowers to wonder how to protect their credit reports by removing these loans.
Unfortunately, when it comes to how to get student loans off, credit report protocols dictate that only illegitimate loans or fees can be removed. If there is a legitimacy issue, you can dispute federal and private student loan information directly through the three credit bureaus. Also, federal student loans offer a discharge in the event of a forgery or identity theft.
The dispute process is the same if there is a late payment on a federal or private student loan you feel is illegitimate. If your federal student loan falls into default, you can have the default removed from your credit after completing loan rehabilitation.
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