Student Loans Hurting Your Credit? Here’s How to Fix It in 2024

Hey Credit Heroes. Student loans can be a great way to get your life on track when pursuing expensive higher education. But they can also be full of pitfalls that can hurt your credit way more than help it. Today, I'm going to share some important updates about student loan reporting, and I'm going to give you some tried and true tips on how to remove them from your credit report. So you better stick around.

So the big question is, how can we take our passion for helping people with their credit and turning it into a successful business without taking loans? Without spending a fortune by bootstrapping it from nothing so we can help the most people and still become highly profitable? That is the question and this podcast will give you the answer. My name is Daniel Rosen and welcome to Credit Repair Business secrets.

In the 20 years since releasing my first credit repair software, I I've helped thousands of businesses scale from the ground up and I've experienced many of the same challenges that credit heroes face, and I learned proven ways to overcome them and succeed. So student loans have made a lot of headlines in recent years, but they aren't a new thing. Back in the 1960s, the government created the Guaranteed Student Loan Program to help students afford the higher cost of higher education. Over the years, the program has changed and shifted several times, but one thing has always remained the same. Student loans can be difficult to pay off and even more difficult to get removed from your credit report. Here's how this relates to us. Student loans are one of the largest sources of consumer debt in the US totaling approximately $1.7 trillion. Roughly 10% of student loan borrowers have defaulted on a student loan, and approximately 11% of all student loan debt accounting about $187 billion is currently in default. In terms of your credit report, student loans are really no different than any other kind of loan. You pay them down each month and there's no problem. In fact, it's great for your credit. But if you miss just a few payments or if you're late, that's when there is trouble. Those missed payments can negatively impact your credit, whether you are the original borrower or the co signer. Here's the thing to remember. Federal student loans make up 92% of all student loan debt, and they are easier to remove from credit reports because the government subsidizes them. Federal loans will report late payments to the credit bureaus after 90 days and then report the loan as defaulted after 270 days. On the other hand, private student loans make up only 8% of all student loan debt, and they are more difficult to remove because they are not backed by the government and they are riskier for lenders. Private loans typically report late payments to the credit bureaus after 30 days and they report the loan as defaulted after 90 days. Either way, these student loans will be listed on credit reports as delinquent and potentially in default even after all past due payments are repaid. And and those negative marks can remain on your credit report for up to seven years. Here's why this is important. Student loan debt has been in the news a lot for the last few years. The Biden administration has tried to forgive millions of dollars in student loan debt, but the Supreme Court recently decided to forgo that plan until a better one could be created. And the U.S. department of Education is working to finalize new regulations with regarding debt forgiveness. But that's not the only thing. You see there's been a real up and down, back and forth thing going on regarding student loan payments ever since the pandemic. If you owed money on a federal student loan, you got a break from making payments for more than three years because of the pandemic. But that break ended in October 2023 and payments were were supposed to resume. But the government allowed for what they referred to as a student loan on ramp, which assured borrowers that no federal student loan would be defaulted and no one would take any hits to their credit score. So you were still required to pay, but if you couldn't or if you were late with a payment, no action would be taken against you. This shielded about 6.7 million delinquent federal student loan borrowers from having negative credit reports. Well, that period just ended at the end of September. And now student loan servicers will resume reporting missed or incomplete payments to the credit bureaus. That's right. No more on ramp. You're on the freeway, it's time to drive. So avoid the consequences of missing or delaying your federal student loan payments. In general, it's always better to make payments if you can, but some options do exist if you're having financial difficulties. Most lenders have programs for people who can't pay now but intend to pay once they find a job or get through some personal hardship. Federal student loan lenders have different repayment plans based on income. Some offer a deferment where payments are put on hold for months or even years. And others even offer forgiveness programs where you no longer owe the debt. And that is a great thing to qualify for. So look into it. Here's what you need to know. The good news is that there are Ways to remove student loans from credit reports and they are not as difficult as you might think. The secret to disputing a student loan is in not disputing it right away. Bruce Politano, the guru of student loan disputing and one of our Millionaires Club members, he shared his proven dispute strategy with me. Bruce has helped thousands of clients with their student loans. Because federal loans are the predominant type of student loan, the following tactics only apply to removing federal loans. STEP 1 Consolidate for every semester that you go to school and you have federal student loan debt, the Department of Education disperses a loan to pay for that semester. So that means that you are getting a separate loan for each semester. So if you go to school for 10 semesters, you're going to get 10 separate loans and that's what it looks like on your credit report. But you're making one payment to cover the entire debt. And if you miss that one payment, all 10 or however many you have will all show as missed or late payment. When federal loans are consolidated, you're basically creating a new loan to pay off the old ones. The old loans are then reported to the credit bureaus as paid in full and closed. They don't say they were paid in full through consolidation. They are reported as if you mailed them a check and paid them in full. And now you have one new loan reissued back to you with one consolidated debt amount. You can find more information on federal loan consolidation@studentaid.gov and I'm going to put the link over there in the show notes. STEP 2 DISPUTE Once the new consolidated loan is reported and the old loans are listed as paid and closed, you can dispute them to have them removed. As always, start by disputing any incorrect information on the credit report regarding those old student loans. They may still be listed as open or loans can be wrongfully listed under your name or the same loan can be listed multiple times, so be extra thorough. Another tactic that's proved most effective for Bruce is to dispute directly with the furnisher. This strategy often gets results because it uses section 312 of the Fair and Accurate Credit Transaction act, which states that you have the right to dispute directly with the original creditor. Here you would send a debt validation letter to the original creditor and demand the promissory note and you can download that letter for free at creditrepaircloud.com dispute letters debt validation and that's a really long link, so I'm going to put that link down there in the Show Notes. This two step process of consolidation and dispute. It works because student loans are hard to get rid of unless the borrower becomes current. That's why it's important to get the loans under control first and then you've got a great shot at permanently removing the negative history. If you want to learn a ton about your credit score and how to fix it, I've created a helpful and free course just for you. The Start Repairing Credit Challenge will help you to take control of your financial future and you'll learn how to improve your credit score and even earn money helping others. You can sign up for the next one starting really soon@startrepairingcredit.com here's my final point. Things regarding student loans and student loan debt are going to continue to shift and change. The main thing to remember is if you pay your student loan off, it can be great for your credit. But if you make late payments or go into default and collections, it can cause a lot of problems for your credit report. Don't wait. Put a plan and a budget together today so you can stay on track and protect your credit. And I'll end by saying if you still need a credit repair cloud account, check it out. It's a software that most credit repair businesses in America run on. Just sign up for a 30 day free trial at creditrepaircloud.com freetrial and if you'd like to improve your credit score and discover how to earn extra income repairing Credit for others, check out my brand new Start Repairing Credit Challenge. Doors are closing soon and it is completely free, so sign up right now@startrepairingcredit.com if you find value in what I share on this podcast, click below to subscribe and follow. Also, give me a five star review or share the show and help me to change more lives. If you have a question or a comment, drop it down below because I read each and every one of them. I would love to hear from you and I'll respond as soon as I can. So take care credit Hero and keep changing lives.

Hey everybody, it's Daniel again and real quick, I want to invite you to join what I believe is the best thing we have ever created inside the credit repair cloud community and it is a free challenge that we call the Start Repairing Credit Challenge. If you want to repair your credit and increase your credit score and you want to learn how credit repair really works, or you dream of having a successful business of your own so you can change lives, make an impact and have financial freedom, or maybe you're looking to add more revenue to your existing business. If that's your dream, you need to get into this challenge. We created this free challenge to help you to learn how to repair credit, help others, and maybe grow your very own credit repair business. A business that really helps people and changes lives. This free challenge will help you to understand the strategy, the tactics, and all the things you need to be successful at credit repair. And the best part is, it's completely free. So I recommend you do it right now. Stop everything. Pause this audio, go online, and go to startrepairingcredit.com that's startrepairingcredit.com and join the next free challenge. And there's a challenge that's starting in just a few days. So go get started right now@startrepairingcredit.com.