How to Dispute Student Loans On Your Credit Report
We often talk about credit card debt, mortgages, and even medical debt, but, in fact, student loan debt is the #1 fastest growing form of consumer debt in the U.S. Right now, student loans have hit the $1 trillion mark, with the average college graduate starting their life of financial independence in the working world saddled with $37,000 of student loans!
It’s hard enough for them to qualify for a home loan and buy their first house, or just earn enough to move out and get their own apartment, car loan, etc. with the monthly payments on that debt, but a significant number of student loan holders are also faced with additional challenges when those student loans hit their credit.
In fact, just about all student loans will report to the credit bureaus so show up on your report, and duplicates, mistakes, fraud, and identity theft involving student loans further complicate the matter.
Luckily, there are ways to dispute student loans that you feel shouldn’t be on your credit report. While every situation may be different, this is a general guide to get you started. But come talk to us for more info and help!
First off, these are the most common problems you’ll run into with student loans and your credit report:
Student loans show up on twice on one or all of your credit reports. In fact, it’s estimated that about 16% of consumers have duplicates in their credit file.
2. Student loans aren’t showing
Sometimes, the student loan companies or lenders get their signals crossed and don’t report your loan at all. While this might seem like a good thing, it can actually cause confusion, leading to missed payments or default, and even hurt your score by not showing positive payment history.
3. Someone else’s student loans are reporting
Just like with credit accounts that aren’t yours, student loans showing up on your report and under your name and social that aren’t yours at all is more prevalent than you might think and can happen for a variety of reasons (including fraud!).
4. The student loan info isn’t correct
Maybe your balance is showing too high, late payments are reporting when you’ve always paid on time, or other miscues, but something isn’t right!
5. Late payments are being reported – but you’ve always paid on time
Of course, this is a huge problem that will start tanking your credit score – even if it’s not true.
So, now that we know what might potentially go wrong with student loans on your credit report, how can you dispute them?
1. Make a side-by-side comparison of your credit reports from the three bureaus.
Of course, you don’t have just one credit report and score but three from the major bureaus, Experian, Equifax, and Transunion, so a student loan misstep may show up on one but not the others. Therefore, the first step is to pull all three most recent reports and compare them, side-by-side and line by line for any inaccuracies or errors.
2. Pull up your federal student loans and check them with government records.
The National Student Loan Data System (NSLDS) is supposed to track and document all educational loans, and they usually do a fair job of it. But whether you just graduated or have been out of school (and paying on your loans) for years, it’s a good idea to pull up your NSLDS listing and cross-check it against the student loans listed on your credit report, just to verify that everything is present and accurate.
3. Contact the student loan servicer.
The moment you recognize a student loan error, misreported item, or something that just looks questionable on your credit report, it’s a good idea to contact that loan servicer. You can do this via their customer service number, but it’s also a good idea to send an email or even a certified letter to get a record of your inquiry. But they’ll be able to contact the reporting agency and fix the issue since it’s their responsibility to report these items accurately.
4. Formally dispute the item with the credit reporting companies.
Now that you’ve contacted the loan servicer, you can wait to see if the issue is resolved. If it’s not – or in instances of fraud, accounts that aren’t yours, or other serious problems – you’ll want to escalate by filing a dispute with the credit bureaus.
In fact, the bureaus are held accountable for accurate reporting through the Fair Credit Reporting Act and other laws and statutes. But there is a formal process for doing so, which is the foundation of any credit repair or credit restoration. Keep in mind that you’ll have to file disputes with each credit bureau individually for each account in question that you’re disputing.
You can either dispute with a formal letter or via their online disputing portal (but it may be a good idea to send a snail mail letter because then you have a certified receipt). The letter has to contain certain information but also clearly spell out which account or loan is incorrect, why, and include any supporting documentation.
5. Wait for the Credit Bureaus to respond.
Per the laws on the books, the credit reporting agencies have 30 days to investigate your dispute and respond in one of two ways: they either fix the problem or, if the lender gives them proof that the reporting is accurate, they’ll deny your dispute. After 30 days, they’ll send you a letter with their findings and conclusion as well as an updated copy of your credit report.
6. File a statement of dispute with your creditors.
If the credit bureau comes back without resolving your dispute and the problem remains, you may still have other recourse. According to the Consumer Financial Protection Bureau, “you can ask that a brief statement of the dispute be included in your file and included or summarized in future reports,” which will give your side of the story for future lenders or credit decisions.
7. Lodge a complaint with the Consumer Financial Protection Bureau.
If there are still duplicates, errors, or outright fraudulent items revolving around student loans on your report that haven’t been resolved, your last resort may be to file a complaint with the CFPB. This agency was enacted to protect consumers so that they can investigate and mediate with the student loan company, the credit reporting agency, and you to try and fix the problem. In fact, once your complaint is filed, the CFPB will forward it to the credit bureaus, who have 15 days to respond.
Of course, consumers can go about this process of disputing erroneous student loan reporting themselves, and there are some serviceable guides and form letters out there. But for serious, professional representation and experienced credit repair, contact Blue Water Credit – you won’t be disappointed!