How To Get a Late Student Loan Payment Removed

Your servicer will report a late payment to the major credit bureaus if you fall behind on your student loan payments. Delinquent monthly payments on your Experian, Equifax or Transunion credit report can seriously damage your credit score, making it difficult to secure loans or get a credit card in the future.

There are several student loan servicers out there. You can contact your specific student loan servicer and appeal directly with the company to get a late payment removed from your credit report. The process can be difficult, but not impossible. Below, we break down all options for student loan borrowers.

What qualifies as a late payment?

There are two different phases your account can fall into once you’ve missed payments, delinquent accounts and defaulted accounts. The latter will have a more severe impact on your credit score. Both negative marks affect your credit history.

Delinquent accounts

A delinquent account means you are behind on payments. If your loan is held by a private lender — such as a private student loan — your lender will typically report the missed payment once you're at least 30 days late. However, if you have federal loans from the U.S. Department of Education, your servicer will wait 90 days before reporting the delinquency.

Even being delinquent once can have a long-term impact on your credit report. Trying to bring your account current before it's 30 (or 90) days late is the best strategy.

Defaulted accounts

A loan enters default after it has existed as a delinquent loan for 270 days. Defaulted loans can result in the following negative outcomes:

• Damaged credit rating due to continued negative credit reporting
• Garnishment of wages
• Tax refunds withheld
• Ineligibility for federal and state financial student aid

If you're unsure whether your account has been marked as delinquent or defaulted, it's easy to find out, because they'll show up on your credit report. U.S. consumers can get a free credit report once every 12 months at AnnualCreditReport.com.

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How do I remove late payments?

Do you have a late payment on your credit report from federal student loans or private loans? Whether you were late on a payment or the information was added in error, you can do something about it.

If the negative item isn't accurate, you can file a dispute with each of the credit bureaus that show the wrong, negative information on your credit reports. The Fair Credit Reporting Act requires them to investigate the matter promptly (typically within 30 days).

If you're truly behind on payments, contact your loan servicer immediately. Make plans to catch up, so you can get in good standing. Do you have the money to repay your loans but just keep forgetting to make payments on time? If so, catch up on your payments and sign up for autopay to prevent missed payments in the future.

You can also reach out to your loan servicer to change your monthly due date to a more convenient date for you.

If you’ve caught up on your loans and still feel your loan servicer is inaccurately reporting your payment status, you can file a dispute directly with the company. Here’s how:

Step 1

Download and print a credit dispute form from your loan servicer.

Step 2

Fill out the form. You’ll need information such as your student loan account number or Social Security number, and specific details about your dispute. Retain a copy of the completed form for your records.

Step 3

Mail the completed form to your loan servicer's address. You can find contact information on their website. You can also see if you can send it via fax, online portal or another method.

When submitting your payment history dispute, include any supporting information, such as a copy of the credit report from the credit reporting agencies.

If you don't receive a timely response to your dispute, you can file a complaint with the Consumer Financial Protection Bureau (CFPB).

Rehabilitating federal student loans

If your federal student loan has gone into default, the only way out might be through loan rehabilitation. Once you’ve gone through the process of rehabilitating a loan, the default classification will be removed from your account and any collections through wage garnishment or Treasury offset ceases.

You’ll also regain eligibility for benefits that were available before your loan defaulted like deferment, forbearance, student repayment plan options and loan forgiveness.

You can only enter loan rehabilitation once. Make sure you’re ready for the opportunity. Here’s how to get started with the loan rehabilitation process for a Direct or FFEL loan:

• Contact your loan servicer.
• Form a written agreement to make nine consecutive payments toward your loan, each within 20 days of the due date. You must make all nine payments on time and within ten months.
• Wait for your loan servicer to establish the payment amounts due, usually calculated to be around 15% of your discretionary income and then divided by 12. This monthly amount could be as low as $5, depending on your discretionary income.
• Begin payments and complete your loan rehabilitation after nine payments.

There's never been a better time to apply for student loan rehabilitation. If you're able to enter a rehabilitation agreement during the COVID-19 emergency forbearance period, all suspended payments will count towards your nine required payments.

So, if you entered a new rehabilitation agreement on April 1, 2022, and your payment due date was April 15, six suspended payments (April, May, June, July, August, and September) would count toward your rehabilitation. The emergency relief measures are currently set to expire August 30, 2023, unless courts rule on student loan relief lawsuits sooner.

Goodwill letter

If your late payments are impacting your credit score and you’ve exhausted your other options, writing a student loan goodwill letter can be worth the effort. A goodwill letter explains the reason your loan payments were late.

When writing your goodwill letter, detail any hardship that led to the late payment of your student loan debt. The success of your letter depends partially on the empathy of whoever reviews your claim. But don’t let the uncertainty of approval deter you. Make your best effort to explain the reason for your late payment and to prove your ability to repay your student loans.

Try to include the following for the highest chance of success:

• A formal and respectful tone, as if addressing a professor
• Identifying information, like your name and account number, as well as date of late payment
• Brief explanation of why you missed payment(s) and why you won’t in the future
• A formal request for a “goodwill adjustment”
• Proof that you usually pay on time if possible

If approved, the servicer will request that credit bureaus delete the late payment(s) from your record. You should expect the change on your credit reporting within 45 days — that’s about how long it takes your loan servicer to report to the credit bureau. Once your change is reported, the credit bureau typically updates your information immediately.

There’s no guarantee a goodwill letter will result in the late student loan payment being removed from your credit report. However, there’s no risk in trying to remove a negative mark. And you have a lot to gain from taking a goodwill approach with your servicer.

What if you can’t remove late payments?

The best-case scenario when it comes to repaying your student loans is to get caught up on late payments and stay caught up. A late payment can stay on your credit report for up to seven years and hurt your personal finances. Doing the work to get your payments and credit back on track is crucial to being able to take other financial steps, such as leasing a car or owning a home.

If your loan amount feels like it's tough to manage, consider an income-driven repayment plan. These plans make student loan repayment easier by placing a limit on your payments.

If you can’t seem to catch up on payments and your debt feels overwhelming, we can help. Reach out to a Student Loan Planner® consultant, and we’ll help you navigate your student loans to find a repayment plan that works for you and your long-term goals.