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Can My Old Student Loans Be Removed?

Dear Experian,

My student loans were consolidated into a new loan. My old student loans now state "Closed/paid collection" and "Claim filed with government for insured portion of balance on loan." Does this negatively impact my credit scores? I see "potential negative account" on all of the old loans. Can I get these old student loans removed to improve my credit scores?

- JNN

Dear JNN,

Although the original accounts are now closed, they are still a part of your credit history. Failing to repay any debt is always considered negative. Negative information such as late payments remains on your credit report for seven years.

What Does Government Claim Mean?

When a borrower defaults on student loans that are guaranteed by the federal government, the creditor can file a claim with the government to recover the amount of the loan. However, the borrower still owes the debt.

The government can then consolidate the accounts into a new loan for collection of the debt. The status "claim filed with government" indicates that has taken place.

How Long Will These Accounts Remain on the Report?

The original student loan accounts will remain on your report for seven years from the original delinquency date. The original delinquency date is the date of the initial missed payment that led to the claim being filed with the government.

Even though you may make one payment every month, student loans are typically reported as a separate loan for each semester that you attended school. Usually, your one monthly payment is applied across all the individual loans. Therefore, missing that payment even once can result in multiple missed payments on your credit report, one for each loan.

If you think you may miss a payment, it's a good idea to contact your lender to discuss your options before you become delinquent. In many cases, the lender will work with you to minimize damage to your credit.

How Can I Help My Credit Scores Recover?

If your student loans were consolidated into a new loan, the new loan will also likely appear on your credit report. The most important thing you can do to help your credit scores recover is to make all your payments on time going forward. Recent late payments hurt your credit scores the most. As time passes, older missed payments will impact you less.

Unlike negative payments information, positive accounts remain on the credit report for up to ten years from the date they are closed. This is to ensure you get credit for positive payment history and to help you rebuild your credit history after a mishap.

Once the seven-year time frame is up, your old accounts will be removed automatically, and only your positive payment history will remain on the report.

Experian also offers a free tool called Experian Boost that can help you improve your credit scores immediately by allowing you to get credit for your monthly utility payments. To find out more, please visit experian.com/boost.

Thanks for asking.
Jennifer White, Consumer Education Specialist

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