If you’ve struggled with managing your student loans in the past, your payment history might have negatively impacted your credit score. But unfortunately, it’s generally not possible to remove missed or late student loan payments from your credit report. 

The one exception is if the information about your student loans is inaccurate. For instance, if a loan balance you’ve paid off is still listed as unpaid, you could dispute the inaccuracy with the credit bureaus to get it removed from your credit reports. 

Here’s what to know about common credit report errors, disputing inaccuracies, and how your student loan payments can impact your credit—both negatively and positively.

Common Credit Report Errors & Issues

While legitimate information about your student loans cannot be removed from your credit report, certain items could be removed, including: 

• Missed or late payments while your student loans are in forbearance or deferment
• Incorrect student loan account information or accounts that don’t belong to you
• Inaccurately reported missed or late payments
• Inaccurately reported student loan defaults
• Closed accounts still listed as open

You can file dispute letters with the three major credit agencies, Equifax, Experian, and TransUnion, to request that these entries be removed. 

How to Dispute Student Loans from Your Credit Report

You’ll have a hard time removing student loans from your credit report if the negative information is legitimate. However, there may be instances when the details are inaccurate. In these cases, you can dispute the information with your creditor or credit reporting agencies.

If you want to start with your loan servicer or lender, here’s how to dispute delinquent student loans or loans in default:

• Write a dispute letter. It’s best to complete this process in writing so you have a paper trail you can refer back to in the future if needed. Write a letter to your servicer notifying them of the inaccuracy and requesting that they remove it from your credit reports.
• Gather supporting documentation. Before you send your letter, gather some documentation to support your claim. This can include bank statements or emails from the servicer showing you made on-time payments or any other reason you believe the delinquency or default notation was made in error.

• Wait for a decision. Once you submit your letter, it may take a couple of weeks to get a response. If you don’t hear back in two or three weeks, contact the servicer to follow up on your letter.

If you’re having a hard time dealing with your loan servicer or would rather not deal with them, you can also file a dispute directly with the credit reporting agencies. You can typically do this online, but ensure you provide supporting documentation for your claim.

The credit bureaus can take up to 30 days to investigate your dispute and will contact your creditor to handle this process on your behalf. If they rule in your favor, the negative item will be removed.

Here are some situations where you can file a dispute with the student loans on your credit report.

If You’re Still in School

If you’re in school, your student loans should be in deferment. If they’ve been tagged as delinquent or in default, you can provide evidence of your enrollment and request they update their records and credit reports accordingly.

If You Were Approved for Forbearance or Deferment

Forbearance and deferment can help in times when you’re struggling financially. But even if your request is approved, loan servicers may mistakenly forget to notate your account accordingly. 

So if you stop making payments, it’ll look like you’re late or in default. But if you can provide evidence that your request for forbearance or deferment was approved, you’ll have a good chance of getting the negative mark removed.

If There Is an Inaccurate Reporting on Student Loan Payments

If you find any other negative, inaccurate information about your student loans, submit your evidence along with your request to have it removed to the credit reporting agencies.

When the Loan Accounts are Closed

If you’ve paid off your student loans, the information on your credit report should reflect that. Your loan accounts should be listed as closed, not open. Provide evidence that your loan is paid off and request to have your open account corrected. 

How Long Will Student Loans Stay on a Credit Report?

If you have a late payment on a student loan — or any credit account for that matter — it’ll remain on your credit reports for seven years. If the loan goes into default, that clock doesn’t reset, so it will stay on your reports for seven years from the date of your first missed payment.

While they’re no longer offered, Perkins Loans are an exception to the seven-year rule. If you miss payments or pay your Perkins Loans late, that information will stay on your credit reports until your loan is repaid in full. 

Your payment history accounts for 35% of your FICO credit score, which lenders commonly rely on in loan decisions. As a result, you must make your payments on time because late payments or non-payment can damage your credit for years and make it challenging to get approved for financing in the future.

Impact of Defaulted Student Loans and Late Payments

Whether you have student loans in default or they’re simply delinquent, it can impact your credit score negatively. The timeline for delinquency and default can vary depending on the type of student loan. 

Certain federal loans may be considered delinquent if you’re one day late on payments, though delinquencies aren’t generally reported to the credit bureaus for 90 days. And if you don’t make payments for 270 days, your loans will be considered in default. The rules are different for Perkins loans and private loans, though.

If you miss payments, it can have a significant negative impact on your credit score. This is because your payment history is the most important factor in your FICO score, and missing a payment means you’re no longer paying your loan as originally agreed. 

It can also result in other negative consequences. For example, if you default on federal loans, the entire loan amount may be due immediately, and you might have to pay collection charges on top of the balance. 

You may also be subject to garnishment of your wages, tax refunds, and other federal benefits. And if you apply for federal student aid in the future, you may be denied. 

If you have private student loans in default, your lender may look to your cosigner for payment or may send you to collections if the debt remains unpaid. 

How to Deal with Late or Defaulted Payments

Because of the negative consequences of late or defaulted payments, it’s best to deal with these payments as soon as possible. If you’re behind in your payments, here are some steps you can take to rectify the situation. 

• Talk to your loan servicer. They may be able to offer some options for you, including a modified repayment plan or a revised payment amount.
• Consider an extended repayment plan if you qualify. Extended repayment plans can come with terms as long as 25 years, which could make your payments more manageable than a standard 10-year repayment plan.
• Look into student loan consolidation. It might be possible to get a lower interest rate and lower your monthly payments if you consolidate.
• Consider refinancing: Likewise, you could end up with a lower rate or reduced monthly payments if you opt for student loan refinancing.

Why You Should Keep Student Loans On Your Credit Report

While you may be able to get certain negative information related to your student loans removed from your credit report, it’s important to remember that you can’t remove the loans themselves. 

And that can actually be a good thing. While negative information remains on your credit reports for seven years, positive information stays for ten years. If you make all of your payments on time, even if you’ve slipped up in the past, that positive payment history can help increase your credit score.

In fact, while negative information can hurt your credit, FICO favors newer information over older items, so paying on time can help make up for past missteps. Other things that could help improve your score include:

• Catching up on delinquent accounts. If possible, focus on catching up on your late payments. Bringing your accounts into good standing may improve your credit score.
• Paying down your credit card debt. High revolving balances can negatively impact your credit utilization, which factors into your credit score. 
• Considering a credit-builder loan. Those with a thin credit file could benefit from applying for a credit-builder loan through a local bank or credit union. 
• Applying for a secured credit card. Secured credit cards are often used to build or improve credit. These cards generally require a security deposit, but payments are reported to the three credit bureaus. Responsible use could result in a bump to your credit score. 

Contact ELFI to Refinance Your Student Loans

Student loan refinancing can make it possible for you to take more control over your student loan repayment plan. Here are some student loan refinancing benefits to know:

• You can potentially get a lower interest rate and monthly payment.
• If you can afford it, you could shorten your repayment period and pay off your debt early.
• If you need a lower payment, you could opt for a longer repayment term and get some relief for your budget.
• You can consolidate multiple monthly payments into one.
• You can add or remove a cosigner from your existing student loans.

Also, keep in mind that in most cases, you can get a quote without damaging your credit. Refinancing with ELFI could help reduce your monthly payments or make them easier to manage if you’re struggling to manage your student loan payments. 

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