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Can Credit Repair Remove Student Loans?
While getting a college education is a priority for many people, it isn’t always financially feasible for everyone.
Student Loans Will Cost You More Than You Think
College is expensive and not everyone can afford to pay for it out of pocket. Often times, this gives people no choice but to rely on the help of a student loan. Student loans help to cover the costs of tuition, books, and more. Although it is a temporary fix, student loans tend to add up over time especially if you’ve switched career paths more than once. As a result, many find themselves in a massive amount of student debt they can’t seem to get out of.
This post has been created to provide information about student loans and credit repair. Right off the bat I will let you know that this post might not be what you’re expecting or wanting to hear.
In general, federal student loans cannot be removed from a credit report except under very specific and remote circumstances. While this may sound like bad news if you are wanting to use credit repair to remove a student loan, it actually isn’t as bad as it seems.
Instead of asking how to remove a student loan, many borrowers would be better served by asking themselves why they would want to remove one in the first place. Because federal student loans must comply with various laws and regulations that most private student loans don’t have to comply with, there are several options available to anyone who has defaulted or is close to defaulting on a federal student loan.
Federal student loans offer many repayment options, including income based options which can lower the monthly payments substantially. While this would likely result in a higher interest cost over time, there is a substantial benefit to your credit report since federal student loans provide a positive account as long as they are current.
Interest Rates And How They Can Make Your Student Debt Worse
Many loan providers give a grace period between the time you graduate and the time you have to start paying back your loan, which may sound great and all— until you realize how much interest starts adding up. The longer you wait to pay it off, the higher your interest will be. What’s worse is not paying back your student loans could also negatively affect your credit score. If you’re someone who’s worked hard to maintain a good credit score, this may not sit well with you.
Unfortunately, it isn’t legal to have your student loans removed from your credit report. If you’ve been paying off your loans in a timely manner, this may actually work in your favor as it could help boost your credit score. But if your loans are in default, this usually just isn’t possible.
Before you fret however, there is a certain loophole that may help you get around this. You may not think it’s this easy but all you have to do is write a compelling essay (a.k.a. a dispute letter) to dispute any negative reports from your student loans.
Before you get to writing, you should first take into consideration a few things.
- What type of loan you have
- How much you owe
- How behind you are on payments
Although you have the option to dispute anything on your credit report, including student loans, it may not be the fastest or most effective option. If you do decide to dispute a student loan, you will need to create a student loan dispute letter. If you can identify why the loan is incorrect, and prove it, then disputing may work. Please keep in mind that student loans require much more documentation and because the loans are for established schools and not random credit card companies or lenders, it is much harder to prove that discrepancies should be resolved in your favor. If you want to try, and have documentation to back up your claim, a student loan dispute letter may be effective. You can find several examples of all kinds of dispute letters in our free credit repair kit.
How To “Flip” Federal Loans From Negative To Positive
Federal student loans also provide a clear and obtainable path to remove a defaulted loan which is being negatively reported on your credit report. If a federal student loan is in default, the borrower generally has the option to modify the payment terms to lower the monthly payment, sometimes to very low levels. After that, making 9 on-time payments in a row will result in the default not being reported onto your credit report anymore. This will result in the “removal” of the defaulted student loan, and the negative effects that has on the credit report, without the need for any credit repair or dispute filing. The loan will then continue to be reported, however now it will be a positive account which results in a higher credit rating as opposed to lowering it.
If you have issues with your federal student loans and negative impact to your credit rating, you are encouraged to try the options above to flip the negative student loan into a positive account on your credit report.
How Private Loans Differ From Federal Loans
If you’ve received a private loan over a federal loan, things might be a little trickier; a private loan is much harder to dispute. This is simply because federal loans offer more payment options than private loans do. If you’ve gone through some sort of economic hardship for example, federal lenders are more willing to work with you as opposed to private lenders.
While no, it isn’t possible to get your student loans removed or repaired on your credit report and sometimes lenders refuse to work with you, that doesn’t mean it’s the end of the line for you.
It’s important to double check your credit report and make sure there aren’t any errors that may affect the status of your loan. If you’ve co-signed for someone else’s loan in the past, you can also try and get that particular loan removed from your credit report so that it doesn’t affect you at all. Ultimately, your best bet is to reach out to your loan provider and try to work things out with them directly.
Private student loan lenders are not required to offer all of the payoff, default removal and forbearance options. Because of this, if a private student loan is defaulted, it may be more complicated to have it removed.
The same rules for removal of private student loans applies as in most other credit situations. Credit repair works by identifying discrepancies in negative credit report information, and then taking action to have those discrepancies corrected. Many times the credit bureaus and lenders do not comply with these corrective actions. Since this results in the continued reporting of inaccurate information, these accounts are often able to be removed though follow-up procedures as the law states inaccurate information cannot be reported.
Private student loans are similar to other credit products, and the following are ways that incorrect negative information pertaining to them can be removed:
- Removal of a student loan that belongs to someone else, but is reported on your credit report.
- Correction to inaccurate payment history, such as when the credit report lists payments that were made on-time as late.
- Negative information that is reported on a student loan while that loan is in a deferment or forbearance status.
- Correction of the status of the loan if reported in error.
Credit repair requires a “paper trail” to work. If one of the situations above applies to your student loan, or there are other details that are inaccurate, you may be able to successfully file a dispute to have it removed, however the bar for removing student loans is much higher than some other types of credit report information.
Thanks for stopping by. If you would like to get started with credit repair, please log on to www.LibertyCreditConsulting.com to download our free credit repair kit. It includes over 100 professionally written dispute letters, dispute tracking software, step-by-step guides and manuals, PowerPoints and much more. Some people have even been able to start their own credit repair business with this free credit repair kit.
To get started right now just visit the Liberty Credit Consulting homepage and click the green button.