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As a student, having a good credit report may not matter, but it will matter the moment you think of a new loan. Any late payment can pop up on your credit report indicating your unworthiness for new credit. In other words, any delay in paying your student loan holds you back from building your wealth.

You may think that the federal government may announce student loan forgiveness. However, that is not always possible. The federal government may do so up to a certain limit (i.e., $10,000). However, private financial institutions will not necessarily do the same. So, in case there is a student loan late payment remark on the credit report after, will you be able to remove it?

That would be challenging but not impossible. There are many long-lasting consequences, but also a way out. Let us be aware of the consequences to understand the importance of curing the issue.

Consequences of Missing a Student Loan Payment

The financial consequences of defaulting on a student loan might be severe. It also depends on the type of student loan. Here’s an example of what can occur:

  • If you default on a federal student loan, you will lose your eligibility for future federal student aid. You will also miss other relief options such as deferral or forbearance. What is worse, that your loan sum would be fully due right away. This is known as acceleration, and it may put a lot of pressure on your finances. In addition, the default will be reported to the credit agencies, causing your credit score to suffer even from more damage. If you do not pay, your earnings or tax refund might be garnished.
  • If you default on a private student loan, you will almost certainly be placed in collections. To recuperate costs, your lender may launch a lawsuit against you. This might seriously harm your credit and your ability to get a loan in the future.
  • The day after you miss a payment on a federal student loan, it is considered delinquent. The longer your loan is delinquent, the harsher the consequences may be — especially if your loan defaults.
  • Private student loans, just like federal student loans, are considered delinquent once a payment is missed. However, the consequences of failing to repay private student loans could come faster than those of federal student loans.
  • A missing or late loan payment lowers your credit score and necessitates immediate action. It makes no difference why the bill was not paid. Missed or late payments will certainly appear on your credit record, lowering your total score. Taking all the above into account, it is natural to find ways to cover up late payments.

Is it Possible to Get Student Loan Late Payment Off the Credit Report?

There is something you can do about it whether you were late on a payment or the information was entered incorrectly.

  • If the negative item on your credit report is inaccurate, you can submit a dispute with each of the credit bureaus that shows the incorrect information.
  • If you are late on payments, call your loan servicer to see what you can do to catch up. Removing late payment information is much harder, but not impossible.
  • If your student loan has already defaulted, there is a distinct option for getting out of federal student loan default: rehabilitation. If you respond quickly enough, it can avoid or delay the effects of default.
  • In case of a late private student loan, there is usually no way to get a bad record removed from your credit reports. The same applies if your private student loans are really in default. 


Rehabilitation is a program generated by the United States Department of Education. The program aims to resolve the default matter systematically. It is a one-time opportunity where an agreement allows debtors to come out of default on the federal student loans.

According to the agreement, students must make nine consequent monthly payments within 20 days of the due date over a period of 10 months. As a result, the student’s debts will no longer be in default. Once the student meets the agreement conditions, wage garnishment and other measures shall be lifted.

How can student debts be rehabilitated?

Here is what you can do to rehabilitate your loan:

  • Contact your lender – the lender might be a servicer, a collection agency, or another firm. Lenders propose solutions depending on your loan amount and the default period.
  • Agree to the payment terms – you must agree to the payment amount in writing. Usually, a tour loan servicer will set your monthly payment at 15 percent of your discretionary income divided by 12 for student loan rehabilitation purposes. At this stage, you will be required to show proof of income. You may be eligible for a payment as low as $5, depending on your income and family size.
  • Make all required payments – if you make the required payments within the 10-month period, your loans will no longer be in default. Your default credit report will be cleared. However, any late payment made before the loan being set as default will still show up on your credit record.
  • You can also send a letter of goodwill to the lender if a payment is late enough to hurt your credit score. With a goodwill letter, you may be able to remove student loan late payments from your credit reports. That will enhance your credit report. Although a goodwill letter does not always work, some customers have reported success. It’s worth a shot! That is because these negative marks on your credit can last up to seven years.

What is a Goodwill Letter? 

A goodwill letter is a means for asking the creditor to erase the negative remarks from your credit reports.

Perhaps you have experienced an unanticipated shift in circumstances or financial difficulties. The goodwill letter can explain this to the lender. In any case, your purpose is to explain why you missed payments and why the creditor should remove them from your credit report.

If your credit report is messy and you want to improve your credit score, goodwill letters are generally not an option. However, if you are a reliable borrower who misses a payment due to a medical or financial emergency or an honest error, a goodwill letter will successfully restore your credit score.

In fact, a powerful goodwill letter helps the creditor to appreciate your circumstances. It is courteous and pleasant. It displays that you accept responsibility for past due obligations and that you will pay your loan on time in the future.

What to Include in a Goodwill Letter?

  • Start by stating that you normally make your payments on time.
  • Demonstrate a recent track record of on-time payments.
  • Point to a specific useful event. For example, you lost your job but have subsequently found another.
  • Maintain brevity and succinctness in your responses.
  • Give a brief explanation if your late payment was due to a hardship.
  • Include any evidence that you believe may help your argument.
  • But, MORE SIGNIFICANTLY, explain the efforts you make or the steps you are taking to rectify the difficulties to avoid a future drawback.

What to Avoid in a Goodwill Letter?

When writing a goodwill letter, avoid the following errors:

  • Long texts – Do not go on and on about nothing. You are requesting a favor from the representative reading the letter. Thus, that person is unlikely to read an entire novel. Be detailed while remaining concise.
  • Negative tone – Maintain a professional attitude. Just be honest, and do not be nasty or aggressive. Accept that it is your responsibility. Also, explain that the circumstance was beyond your control and that the payments were late due to reasons out of control.

What to Expect After Sending the Goodwill Letter?

There is no guarantee that a goodwill letter will work. Moreover, there is no specific formula to follow to maximize your chances of success. Keep in mind that creditors are not obligated to respond to your request. You may not get a response at all. They are probably going to help you if you are a good customer. Remember, there is no incentive for them to alienate excellent consumers. It is also possible that, in response to a creditor’s request, the credit bureau will update your credit reports without notifying you. So, keep an eye on your reports simultaneously to see if anything is changing. If you do not receive a response or observe a change in your credit reports after a month, be persistent. Call, write and follow up on your case. 

Bottom line

One of the most important financial difficulties that many young Americans confront is student loans.

Making these payments while juggling other financial obligations is difficult. As a result, many borrowers default on their student loans each year. Failure to pay a student loan or late payments can have several severe implications.

This includes salary garnishment and a decline in your credit score. Fortunately, there are things you can do to avoid this. So, act wisely and quickly if you are having trouble making your loan payments.

Still having second thoughts? With us you won’t need to wait for the approval of the personal loan for weeks. We can help you to get the cash you need in a secure and fast way. Fill in the application now and get the money in 1 day!

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