For the past seven years, Kat has been helping people make the best financial decisions for their unique situations, whether they're looking for the right insurance policies or trying to pay down debt. Kat has expertise in insurance and student loans.
Kat Tretina Personal Finance WriterFor the past seven years, Kat has been helping people make the best financial decisions for their unique situations, whether they're looking for the right insurance policies or trying to pay down debt. Kat has expertise in insurance and student loans.
Written By Kat Tretina Personal Finance WriterFor the past seven years, Kat has been helping people make the best financial decisions for their unique situations, whether they're looking for the right insurance policies or trying to pay down debt. Kat has expertise in insurance and student loans.
Kat Tretina Personal Finance WriterFor the past seven years, Kat has been helping people make the best financial decisions for their unique situations, whether they're looking for the right insurance policies or trying to pay down debt. Kat has expertise in insurance and student loans.
Personal Finance WriterUpdated: Jun 15, 2022, 1:00pm
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As you get ready to apply for a car loan or mortgage, you check your credit report to make sure everything is in tip-top shape. But you find that the student loan you paid off last year is marked as unpaid—what gives?
Unfortunately, credit report errors are common. In a recent study by Consumer Reports, 34% of individuals found at least one error on their credit reports.
If you find a mistake regarding your education debt, here’s how to dispute student loans on your credit report.
Student loans can be wrongfully reported to the credit bureaus. When reviewing your credit report, these are some of the most common mistakes you might find:
You may find that a loan you already paid off is listed as open or unpaid. This issue can happen for several different reasons, but the most common explanation is a reporting delay. It can take loan servicers several months to report your payments, so there can be a delay between when you pay off the loan and when your credit report is updated.
If your loans are in forbearance or deferment, it’s especially important to monitor your credit. Accounts could be wrongfully listed as delinquent when, in actuality, you had the loan servicer’s approval to pause your payments. Errors about your loan status typically occur due to a mistake by your servicer. They likely missed your payment status and submitted the delinquency by accident.
Sometimes loans listed under your name may occur due to a simple mistake—someone with a similar name may have taken out a loan, and the information got mixed up. But it can also occur when identity thieves use your information to open new accounts. In either case, you can dispute student loans that you didn’t take out.
You may find that your student loan is listed multiple times on your credit report. If a single debt shows up as several accounts, it can significantly impact your debt-to-income (DTI) ratio and affect your ability to qualify for other forms of credit. This problem can happen due to paperwork mistakes, but it can also happen if your loan is transferred to a new servicer. There may be overlap when the loan is listed in two places before it’s updated.
If you qualified for loan forgiveness or loan discharge—for example, if you qualified for federal total and permanent disability discharge—and your loans are still listed as open on your credit report, you can dispute the student loans. Loans that have been forgiven can be wrongfully listed due to errors on the loan servicer’s end.
Finding errors on your credit report may induce panic, but you submit a dispute to have them corrected. Student loans can affect your credit report and credit score, so it’s important to take action to fix your credit. Here’s how.
Usually, you can view your credit reports from each of the three credit bureaus for free once per year at AnnualCreditReport.com. However, you can receive free weekly through April 20, 2022 due to the Covid pandemic. When you view your credit report, look for the following:
If you find any inaccuracies regarding student loans, gather the documents you need to challenge the issues on your credit report. The exact information you should provide depends on the mistake you’re disputing, but you may need copies of the following documentation:
Next, write a letter to the loan servicer that submitted the incorrect information to the credit bureaus. The letter should include the account you’re disputing, why you believe the account is inaccurate, any supporting documentation you have and a request to remove or fix the account. You can use a sample letter from the Federal Trade Commission (FTC) to help you write your own.
Submit your dispute letter to your loan servicer or lender by certified mail or through your online account. If you’re not sure where to send it, contact the lender’s customer service.
As of 2021, there are 10 federal student loan servicers. Borrowers with federal loans can contact their servicer with the below information:
Nelnet
P.O. Box 82561
Lincoln, NE 68501-2561
California Residents:
P.O. Box 82578
Lincoln, NE 68501-2578
After contacting the loan servicer, you should also submit a dispute with the credit bureaus. You can dispute the accounts online or through the mail:
Now that you know how to dispute student loans on your credit report, you may be wondering how long it takes to fix those problems. Here is what to expect.
To catch any problems with your student loans, be sure to check your credit report regularly. If you see any issues, start the dispute process right away. If your personal information has been compromised, you may want to consider putting a credit freeze on your credit report to prevent identity thieves from taking out lines of credit under your name.
Federal and private student loans affect your credit score in the same ways that other term loans do. Your payment history makes up the largest portion of your credit score, so making on-time payments can help improve your credit. Missing or late payments will hurt your credit. Student loans can also affect your total debt obligations and increase your debt-to-income ratio. Lenders want to see that you earn enough money to comfortably afford all your debts. If you owe a lot of money relative to your income, your debt-to-income ratio will be higher—which is a red flag to future lenders.
If you’ve paid your student loans as agreed and your account was closed in good standing, that positive record can remain on your credit report for up to 10 years. If you have negative marks on your loan, such as missed payments or a default, those can stay on your credit report for up to seven years. However, it may be possible to remove the default status from your credit report if you rehabilitate your loan and bring it current.
If the information in your credit report is accurate, you generally can’t remove a federal student loan from your report—you’ll have to wait for it to be removed once enough time has passed (typically seven to 10 years). The exception to this rule is federal Perkins loans—these debts can remain on your report until they’re paid in full.
Negative marks on your credit typically disappear after seven years, so you may not need to dispute what’s on your credit report if it’s already been removed. However, even if your loans no longer appear on your credit report, you’re still responsible for repaying that debt if you have a pending balance.
If your student loan loan doesn’t appear on your credit report, the lender may have made an error and failed to report it. Your loan may also have naturally aged out of your credit report after seven to 10 years.
Both federal and private student loans will appear on your credit report once the money is distributed to you or your college. Even if you’re not currently required to make payments, the loan accounts will still be reported to credit bureaus. Most private student lenders also conduct a hard credit check when you submit an application. These credit checks will appear on your credit report, even if you don’t finalize the loan or borrow money. However, the effect on your credit is minimal.
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Personal Finance WriterFor the past seven years, Kat has been helping people make the best financial decisions for their unique situations, whether they're looking for the right insurance policies or trying to pay down debt. Kat has expertise in insurance and student loans, and she holds certifications in student loan and financial education counseling.
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