In Parts 1 – 5 of this report, we discussed the importance of maintaining good credit habits in order to obtain a high credit score. The bulk of Part I focused on strategies to get the first five credit report “killers” removed from your credit report so as to prevent your credit score from plunging to the deepest lows. Guidelines on how to have late payments, collections and charge-offs, judgments, wage garnishments and car repossession deleted from your credit report were given there.
In Part II, we will continue to give tips and strategies on how to strike out the remaining five slayers of your credit rating. This part will cover student loans, back taxes, medical bills, bankruptcies, and foreclosures. Again, please take note that the methods given in the following paragraphs are for accounts that are indeed yours. If you know that the derogatory item in your credit report is not yours or if you suspect that you are a victim of identity theft, you should dispute it and seek legal remedies should that be necessary.
When you defaulted on your payments on a student loan, you can expect a lot of nasty things to happen. You can get your wages garnished if you are already employed, incur collection fees and other costs, get harassed by private debt collectors, and worse, and suffer from bad credit rating. One unpaid student loan can mean multiple derogatory listings in your credit report since it will contain not only the original loan you defaulted on but the subsequent collection entries as well. It’s easy to see why defaulting on a student loan can mean a failing grade in your credit report.
If you had incurred a private student loan, it will be treated like any private debt which will stay on your credit report for 7 years. However, if you had applied for a federal student loan, you can expect that to be reported on your credit report indefinitely for as long it continues to remain unpaid.
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To have your delinquent student loan removed from your report, you will first have to contact the loan provider to check the details of your defaulted loan. If your student loan is already in default for more than 270 days there’s a very big chance that it might already have been turned over to a private collection agency. You can ask that it be removed from your record in exchange for you settling the amount in full or in monthly increments. Similar to a late payment on your credit cards or other bills, you can write a goodwill letter explaining why you defaulted and reiterating your promise to settle your loan.
If you had incurred a federal student loan, you can apply for the Federal Loan Consolidation Program which will give you the chance to rehabilitate your loan by making payments you can afford on time. When you have complied faithfully with your obligations for nine months or more, you can expect your credit rating to improve. Get in touch with the Collections Office of the Department of Education for more options to help you pay your student loan and have it removed from your credit report.
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