No one wants to have closed accounts, like a student loan, appearing on any credit report. These types of listings can have a negative impact on your credit score. If it was in collections at any time, it might stay on your credit report for 7 years.
The first thing you should do is review your credit reports. If one of your reports is much lower than another, start with that one first. It may have items on it that are not appearing on the other reports. If a previous account, like a student loan, was closed, getting it removed from your report can only help your credit score.
However, can you actually remove a closed student loan from your report? In some cases, the answer is ‘YES’!
Can I Really Remove a Closed Student Loan Account?
When you want to remove a closed student loan account, you have a few options.
1) Write a ‘goodwill’ letter to the credit bureau
First, writing a goodwill letter may be done when you couldn’t make your loan payment due to illness or circumstances you could not control. Remember that a credit bureau is never obligated to remove a closed account.
2) Dispute credit report account inaccuracies
If your letter is well written and has mitigating circumstances, the credit company will probably review your previous payment history to verify the accuracy of your letter before deciding if they will take any action.
If you believe your credit report has inaccuracies related to your student loan, check it carefully, and report those inaccuracies (again by letter) to the company. In your letter, you should justify any payment you missed and provide reasons why your report may be inaccurate. Always present as many facts as possible.
3) Wait until it ages out
If nothing else works, you can simply wait for the negative item to age. The older an item on your report gets, the less impact it has on your report.
Here are some steps you can follow that may help you remove a closed student loan account from your credit report:
Understand the Impact of Closed Accounts
Many people do not realize that an old, closed account may still be a significant factor in their credit score. Other factors include applying for new credit or loans. Even if you paid off your student loan in full, your account might be hurting your score. Were you late in any of your payments, or did you have a collection agency contact you for lack of payment? If yes, it was likely reported to the credit bureaus, and your score was impacted negatively.
Understand Your Choices
You shouldn’t just remove all closed accounts. You may have old, closed accounts that have good credit history, and you don’t want to remove these. Doing so will actually reduce your credit score. Only target those accounts with a negative history. Negative history regarding student loans usually means you missed some payments or were very late in making some of them. This is not uncommon, so don’t panic, you can repair your credit.
Can I Get Help?
Yes, there are companies that may be able to assist you in restoring your credit and removing closed accounts. There are credit repair companies that handle these types of problems. However, be cautious. The credit repair industry has had a lot of companies that get poor results and do not do what they say they can do. Research online any company you are considering, check reviews and comments from customers to verify their reputation before you contact them.