Credible takeaways
- You can't remove accurate information from your credit report, but you can dispute any errors and have them removed.
- Disputing incorrect student loan information from your credit report can help you improve your overall credit standing.
- Federal loan borrowers can get a default status removed from their credit report through loan rehabilitation or the Fresh Start program.
- Some private lenders may offer rehabilitation programs, which could remove a defaulted loan status from your credit report.
Your student loan payment history is reflected on your credit, and it can have a positive or negative impact on your credit score. If your credit has been negatively impacted by your debt, you may be wondering how to remove student loans from your credit report. This guide will explain what your options are, and offer tips on how to improve your credit.
Can I remove student loans from my credit report?
If all the information on your credit report is accurate, you won’t be able to remove student loans from it. However, if there are errors, you can dispute them and have them removed.
Usually, borrowers in default who see their credit score drop want to know how to remove student loans from their credit report. Unfortunately, you can’t simply wipe out the default from your record. Defaulted loans and late payments can stay on your credit report for seven years. However, depending on the type of student loan you have, you may be able to take action to get the loan in good standing and reverse some of the damage.
Related: How To Get Out of Student Loan Default
How to remove defaulted federal loans
If you’ve defaulted on your federal student loans, you may be able to clear the default status from your credit report. However, you can’t remove any previous late payments.
Getting your defaulted loan back in good standing can help reduce the negative impact it has on your credit report. Here are your options:
1. Fresh Start program
The Fresh Start program is a limited one-time opportunity for borrowers in default. If you enroll in the program, your loans will be moved to a loan servicer and will be reset to “in repayment” status. The most significant benefit is that your defaulted loans will be removed from your credit report. After that, you can enroll in an affordable repayment plan, typically one of the four income-driven repayment (IDR) plans.
The Fresh Start program is in effect until Sept. 30, 2024. During this time, any missed or late payments won’t be reported to the credit bureaus. To take advantage of this program, you can contact your loan holder by phone or mail, or sign up online.
2. Loan rehabilitation
Student loan rehabilitation requires you to make nine consecutive, on-time monthly payments within a 10-month period. Your payments are calculated using a specific formula, and are based on your income. Loan rehabilitation can remove the default status from your credit report, but not late payments that occurred prior to default.
Important:
Loan rehabilitation is currently on pause through September 2024, and the Fresh Start program is taking its place.
How to remove defaulted private loans
In general, you won’t be able to wipe out your private defaulted loans from your credit report. You may come across companies that offer to remove them for a fee, but be aware that this is likely a scam, and it won’t actually reverse the damage to your credit.
If you have defaulted private student loans, talk to your lender about any potential options. The Fair Credit Reporting Act was changed in 2018 to allow some banks to provide rehabilitation programs for borrowers with defaulted private student loans, according to the Government Accountability Office. If this option is available and you complete the process, you may be able to request the default status be removed from your credit report.
How to dispute inaccurate information
You can’t remove negative information on your credit report that’s accurate. But if there is inaccurate information regarding your student loans, it’s important to dispute the errors. Some potential reasons to dispute student loans on your credit report include:
- Incorrect payment status (falsely marked late or delinquent)
- Incorrectly marked as in default
- Student loans you didn’t take out are on your credit report
- Accounts reported as open when they’re closed
Here’s how to remove student loans from your credit report if there’s inaccurate information to dispute:
- Contact the credit bureaus: Reach out to the three credit reporting agencies — Equifax, Experian, and TransUnion — to dispute the errors. Each agency may have its own dispute forms. Provide copies of any evidence or documentation supporting the dispute. If mailing a letter, you can use this template from the Federal Trade Commission (FTC). Include the issue and request the errors be removed or fixed. The credit bureaus will have a period of 30 days to investigate, and may request more information.
- Contact your loan servicer or lender: In addition to contacting the three credit bureaus, you also need to contact your loan servicer or lender to rectify the issue. The information on your credit report is provided by your loan servicer or lender, so contact them to dispute the errors. You can use this sample letter from the FTC, and provide supporting documentation.
Keep copies of all documentation and check your credit report once everything is taken care of to confirm the inaccurate information isn’t included.
How student loans affect your credit score
Taking out student loans as a young borrower can help you establish a credit history. If you make on-time monthly payments consistently, your credit score may improve over time.
However, if you make late payments, your student loans can become delinquent, which can hurt your credit score. This effect can worsen if your loans go into default. Defaulting on student loans can have a significant impact on your finances. Your loans become accelerated (meaning they’re due immediately) and can be subject to debt collection and associated fees. It could also lead to wage garnishment and tax refunds being withheld, among other consequences.
Negative information may stay on your credit report for seven years, which can impact your credit score and your ability to get approved for loans or qualify for competitive interest rates.
Can refinancing help my credit?
Student loan refinancing can impact your credit both negatively and positively. Initially, you may see a slight drop in your credit score after applying for a refinance loan because of the hard credit inquiry that private lenders perform.
However, once you start repaying the refinance loan on time, your credit score should bounce back up, and may even increase. This is because consistent, on-time payments reflect responsible credit behavior.
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Removing student loans from credit report FAQ
If you want to learn more about how to remove student loans from credit reports, here are the answers to some frequently asked questions.
How long do student loans stay on your credit report?
Your student loans can stay on your credit report for up to 10 years if you had a positive payment history and repaid them in full. So even if they’re closed accounts, you could benefit from your repayment history. If your student loans are delinquent or in default, the information can stay on your credit report for seven years.
Can student loans damage your credit?
Student loans can damage your credit if you miss your monthly payments. Late payments can result in delinquency. If your federal Direct Loans aren’t paid for 270 days or more, they are considered in default. Information about delinquent or defaulted loans stays on your credit report for seven years.
How do I get defaulted student loans off my credit report?
You can get a defaulted student loan off your credit report if you rehabilitate the student loan or take part in the Fresh Start program. While the default status will be removed, your late payments prior to defaulting will still show up.
Why is my forgiven loan still on my credit report?
It may take a few months for your forgiven student loan to show up as closed on your credit report. If your payments were consistent before they were forgiven, the account will remain on your record as a closed account for 10 years.
