How To Get A Defaulted Student Loan Removed From Your Credit Report

If you have federal student loans, after 90 days of late payments your loans are deemed delinquent. But after 270 days, they fall into default status, which can have terrible effects on your loans, your payment options and your CREDIT. In today's video we cover how to have the default status for your loans removed from your credit report. Topics covered include:
- 3 options for getting your loans out of default
- Why only one option erases the default status from your credit report
- Student loan rehabilitation and its impact on your loans
- How long late payments remain on your credit report
And much more! To drive home these concepts, check out our videos on similar topics covered in today's session
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[@olderrol1968]

Damm. Student loans. Is like having child support. Lol

[@Ms.Royalty7743]

I swear 😂

[@ligegeorge]

Than you so much !!! Ive been living with this issue for years. The collections fees are ridiculous and day to day issues take priorty. Its an ugly cycle I think ill be able to rehad for 9 months and then take advantage of the public service loan foregiveness program

[@victoriabatista7029]

Thanks for posting this! I also have a loan that has went to default but when I spoke to the rep they first said that I have to pay the loan in full in order to get out of default. Shortly thereafter discussing my options I was able to negotiate with them to pay a portion of the amount to get out of default and could then go on a payment plan for the remainder. I have some reservations about this because again, they were very adamant about me having to consolidate or pay in full until I negotiated. Is this common? 🤔

[@nates9211]

@Escape Student Loan Dept thanks for the info as usual. I would like to ask you: I have derogatoriness and some defaults on my student loans. Need to get business loans, but would also like to have the long trade-line history. You suggest to just outright delete the accounts or try to rehab them (Fed Loans)? Also, do you offer consultations. Thanks

[@salalfda5433]

Hello Can you please discuss the first option , If I pay it off completely since they offered me 10% off the principal if I pay a lum sum of 90% of the loan within 90 days . Will the history of me being defaulted be removed from my credit history ? Will it show that I was ever defaulted on the loan ?

[@MAMIHUANA]

Trying to help my mom with her over 25+ yr old loans, theyve gone thru a crazy series of snowballing interest fees/collections/defaults/transfers and its been really confusing to figure out where to start... DO you offer consultations?

[@timthetrucker6216]

🔥

[@maggiem7435]

What is the timeframe after completing the rebab program that it gets taken out of your credit report ? & can you then be in good standing to apply for a home loan ? Thank you for your time. Great video with lots of information

[@EscapeStudentLoanDebt]

Thanks for watching Maggie! The time frame for having it removed from your credit report can vary based on each credit bureau, but student loan lenders report your status each month so hopefully no longer than that. One way to potentially speed up the process is after you've gotten your loan back in good standing, you can file a credit dispute with the bureau. Once the dispute has been received the bureau will have to investigate to validate the claim, and they could find out that it's in good standing through that process if there has been a delay. As far as buying a home is concnerned, the default will help but the late payments will remain. Depending on how many late payments you had, you may or may not see your score rise high enough to immediately qualify for a home once the default is removed.

[@AllAboutPurple]

@@EscapeStudentLoanDebt This is great information. I just got my student out of rehab and good standing during this pandemic, however after my loans were sent back to loan company, my credit score went down a significant amount. You stated that a dispute could be made after getting in good standing. Do you have a video on that? Like what statement to make to dispute it?

[@toyaturner5836]

My student loans are due to fall off my credit report in July. But I know they will still show in Caivrs. If I pay it off before they are due to fall off, will it restart over on my credit report showing the late and non payment history? So should I just wait until it fall off and just have a lender pull caivrs report and pay it then?

[@joshuaderstine4133]

I have $20,000 in federal school loans and I can pay them off. What will happen to my credit report if I pay them off in full all at once? Can I make a deal to have them completely remove from my report if I pay them off?

[@lumpygasinavacuum8449]

I've made payments for six months

[@tailoredbeats2999]

Is it possible to pay for delete? I have multiple loans in default, and haven’t really worried about the status of those loans because I’ve been able to buy most of my assets with cash.. I’m now looking at buying a home, and I believe these defaults will finally hold me back from an important purchase.. I know the gov started garnishing my tax refunds back in 2018, subsequently I have not done my taxes for 2019 & 2020. My plan was to pay the defaulted loans in full, and potently have them deleted from my report. I have no other debt.

[@EscapeStudentLoanDebt]

My apologies for the delay in responding. Unfortunately even if you paid back the loans the late payments would still stay on your credit report, which could be a problem in applying for a home loan. It would remove the default from the report which can be helpful, but there's no way to delete the late payments ahead of the schedule that they would typically fall off of your credit report

[@ezbiz1001]

What is happening to Navient? Why have my Navient student loan now reports as defaulted and transferred when the moratorium is still in affect until Jan 2022?

[@EscapeStudentLoanDebt]

Thanks for watching Cheryl! Navient is ending their contract as one of the federal loan servicers. If you haven't already, you should get an email/letter that your loans are being transferred to a new servicer, Maximum. If your loans aren't actually in default I'm not sure why they would be listed as such on your credit report. Have you made sure that you have either Direct Loans or federally-owned FFEL loans? Those are the only loans that were eligible for the payment freeze. If you do have those loans and they're incorrectly reported, you can file a credit dispute with the credit bureau to hopefully have it resolved

[@guiller2371]

Consolidation is a trap.

[@chiomaalikpo]

Hello i went into default with a private loan. I was able to pay off the default payment but now my credit score has been impacted heavily. What can i do in order to remove those late fees or do i have to wait the 7 years for it to naturally roll off. But is there a way to increase my credit even if i cant have those late fees removed? How long does it typically take to increase back to good standing even with the late fees still on my account?

[@EscapeStudentLoanDebt]

Thanks for watching! Unfortunately the late fees can't be removed without waiting the 7 years. So they won't fall off all at once, they'll fall off 7 years from each missed or late payment. In terms of other ways to increase your score, your payment history makes up 35% of your FICO Credit Score. So it is a big piece to overcome, but you can minimize its impact by improving the areas making up the other 65%. Those are credit utilization (30% of your score), which means things like keeping your credit card bills paid off before your balance is checked at the end of your statement period. Age of your credit is 15% of your score, and the older the better which means limiting the number of new accounts you open. Credit inquiries are 10% of your score, as well as another 10% for credit mix (the diversity of your types of credit). It's hard to know how long it will take to show improvement because the variables for each person our different

[@chiomaalikpo]

@@EscapeStudentLoanDebt wow thank you so much I greatly appreciate it

[@ThisMarcuss]

How long does it clear out if default after paid in full?

[@EscapeStudentLoanDebt]

Thanks for watching Marcus (and sorry for the late reply, I'm just seeing your message). If the loan is paid off the default status will be removed but any late payments will stay for up to seven years

[@stevonnegerman5919]

I was in default and they gave a payout option so after some creative thinking and such we were able to pay the payoff....how do we get the default removed in that scenario?

[@EscapeStudentLoanDebt]

Federal loans do not typically offer a payoff option for lower than the amount actually owed. If it's a private student loan, it would be up to that lender and the laws of your state to determine how long they can come after you for the debt. We unfortunately would need to know more about this situation before offering advice on it.

[@randyking9489]

@@EscapeStudentLoanDebt Hi. Department of Ed. Used to have 3 options for paying a lump sum to completely pay off a defaulted loan. One was total principal plus one half total interest. Other was principal plus collection costs or something of that nature and you chose one. Are they still accepting this? Thank you

[@emmashaye]

Will paying the loan off in full remove it from my credit report in the same way that loan rehabilitation would?

[@EscapeStudentLoanDebt]

Thanks for watching Emma! A paid-off loan will still stay on your credit report for a number of years. If you pay off a defaulted loan, your credit report will show that it's not in default, but it will still reflect the late payments you had while the loan was open. Typically things like late payments stay on your report for up to 7 years, while the account itself may continue to be reported for up to 10 years.

[@sarahthompson3493]

@Emma You can always send a written contract for the lender to sign agreeing they will remove the late payments or anything negative in return of paying off the account. We call it a "pay for deletion" letter. You can search for a template online or I can send you a copy for free.

[@julietlloyd3350]

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[@Glad2BGolden]

@@EscapeStudentLoanDebt This is the information I was looking for. I defaulted on my federal student loans. It was charged off to a loan servicing company. On the original loan it’s been 10 years, on the loan company that picked up the debt it’s been 7 years. That company sent it to another loan service and that’s been over 6 years. In fact some of that money was collected through garnishment. Can I get them all removed? And if so who do I write the letter to requesting a removal? Thank you.

[@stevepiacenza2426]

Can I default on my car loan?I can't believe people should held accountable for their stupidity