FedLoan will remove late student loan payments from your credit report, but only if the information reported is inaccurate.
Here's what to do to get inaccurate late payments removed from your credit report:
- Download the Fedloan Direct Credit Dispute Form.
- Complete the form and provide evidence of your dispute and include your FedLoanaccount number.
- Make a copy of the completed form and evidence (e.g., highlighted Equifax credit report you're disputing)
- Send the copy to FedLoan Servicing by fax, 717-720-1628, or by mail at FedLoan Servicing Credit, P.O. Box 60610, Harrisburg, PA 17106-0610.
It usually takes about 6-8 weeks to get a response as to whether they're going to correct your credit history or not.
If they refuse, your next step may be to contact the U.S. Department of Education's Student Loan Ombudsman.
Goodwill letters to remove late payments don't work usually
In my experience, goodwill letters don't work. I have never seen FedLoan or any other student loan servicer send a goodwill adjustment to the credit reporting agencies (Experian, Equifax, and TransUnion).
That said, what do you have to lose? A stamp? Time?
All FedLoan can do is deny your request to update your payment history.
So I say send the letter. But don't get your hopes up.
How to handle missed payments
Let's assume FedLoan refuses to remove the missed payments, and the Ombudsman agrees.
What do you do then?
One option is to hire a credit repair professional to try and remove the information to improve your credit rating.
Some clients have said they were able to get the late payments removed from all 3 credit bureaus. (Some were even able to get all of their federal student loans removed.)
But many of them told me that the removal was temporary. The information came back.
And that makes sense.
Accurate information can remain on your credit report. And if FedLoan has confirmed that you missed your monthly payments and you weren't in a deferment or $0 loan repayment plan, then that information is accurate.
If it were me, I'd stop fighting a losing battle. Instead, I'd focus on protecting and improving my credit score by making sure I catch up on my missed payments and ensure I never miss a due date again.
With federal loans (and private student loans for that matter) you have 2 ways to catch up on missed payments:
- Pay the missed payments or
- Request a deferment/forbearance
After I brought my loans current, I'd explore my repayment options and choose the best income-based repayment plan for my situation. For most student loan borrowers, that plan will either be the REPAYE or IBR plan.
Due to the coronavirus pandemic, the federal government has ordered the U.S. Department of Education to:
- suspend the interest rate
- suspend student loan payments
- credit student loan borrowers towards loan forgiveness programs and
- refund wage garnishment and tax refund offsets
for federal student loans owned by the Department of Education. (Check the federal student aid website, studentaid.gov to see what type of federal loans you have.)
These benefits apply from March 13, 2020, through September 30, 2020.