• Michael DiBartolomeo

How to Get Late Student Loan Payments off Credit Report

Updated: Dec 15, 2020

It is quite easy to miss a student loan payment, and it's possible to write a goodwill letter to explain what happened.

A missed loan payment or a late payment hurts the credit score and requires fast action. It doesn't matter why the bill wasn't paid. It's likely that the missed or late payment can show up on the credit report and lower the overall score.

Late Student Loan Payment

What Happens if a Student Loan Payment Is Late?

Typically, the lender has the right to apply late fees to the account immediately and may do so, regardless. It is possible to call and dispute those extra charges. The lender usually waits 30 days to report the missed payment to the three primary credit bureaus.

A private lender is sure to report the late payment after a 30-day delinquency. This means that the person can make a payment, even after the due date, without it showing up on the credit reports. Generally, though, the lender must wait a full 90 days before the late payments are reported if it's a federal student loan from the government.

Before getting to that point, it would be best to enroll in automatic loan payments. That way, the amount due is removed from the bank account on time each time. Many times, the creditor offers income-based repayment plans. Sometimes, the lender may reduce the monthly interest rate by about a quarter of a percent point if auto-pay is chosen or it could turn into capitalized interest on your student loan, depending on the type of loan. A person going through a minor or short-term setback can also be eligible for a forbearance or deferment, allowing them to postpone all payments without any negative reports on their account. Sometimes, this can also help reduce the amount of the payment needed.

If a payment is late enough to negatively affect the credit score, it's best to send the lender a letter of goodwill. It isn't always going to work, but it never hurts.

With this letter, it's possible to ask the lender to not add an accurate negative entry onto the credit report. It can also be used if the negative issue was already reported and ask that it be removed. Lenders don't have to accept the request, but it's helpful if they do. When the adverse mark is removed, it often improves the person's credit score. This is beneficial for those who plan to get a car loan, buy a house, or need a credit card.

Many law firms in New York believe that goodwill letters can be effective, but it's not always the case. It's possible to send one in specific circumstances.

Should a Person Send a Goodwill Letter?

Goodwill letters can be appropriate if the late payments were caused by a hardship, such as:

  • Job loss

  • Divorce

  • Medical issues for the borrower

  • Medical issues for a loved one

It's always appropriate to send a goodwill letter if the mistake was honest, such as the person forgot to make a payment on the student loan on time.

Everyone is human, so it's best to tell the truth and explain what happened in the goodwill adjustment. However, those who have a late payment and are still considered a risk may find that a goodwill letter doesn't help much. Those with a history of late payments or have high debt-to-income ratios may be part of this.

Also, goodwill letters don't help if the credit report mistakenly says there is a late payment. It is important to dispute the error from the three major credit bureaus specifically. They are the only ones that can remove the late payment entry that never happened.

Here are some reasons to write goodwill letters:

Technical Issues

Lenders process payments all the time, and they can make mistakes. Therefore, the payment might not have gotten recorded right.

Wrong Address

When someone moves, they often forget to change the address with various companies, which can include the lender of the student loans. Alternatively, it's possible to call the company's customer service line to get back on track with the address and have the late payment removed.

Negative Closed Account

A goodwill letter helps if the creditor legally closed the account and all the charges were paid or dropped, but it still shows up in the list from the credit reporting agencies.

What to Include in the Letter?

When writing the goodwill letter, start by talking about the payment history. Sending a payment on time is important, and the party in question knows this. If the late payment occurred because of a hardship, explain the situation briefly. Include documentation and information that supports the case. Any identifying information should be included, too, such as an account number. Show that there have been no other missed payments, and payments on time have been approved in the past.

Explain the steps taken to resolve those issues that led up to the late student loan payments. For example, a person who chooses automatic payments isn't going to have any other late payments in the future.

If there were address or technical issues, provide appropriate documentation. If the bank had an outage, include the story clipping or link. Show that a change of address was filed with the USPS. Explain everything thoroughly, but only include the facts.

Tell the lender why it should remove a late payment. It could be that the student loans were only a day late. Situations like these rarely require the creditor to add the adverse entry to a person's credit report. Still, mistakes happen.

Consider telling the lender why the late payments should be removed. For example, if it is going to keep the person from getting a mortgage, say this.

There are a few things to avoid in the goodwill letter, like:

  • Rambling - Don't go on and on about the personal situation. Keep it to a page and make sure to ask to remove late payments fairly quickly in the letter.

  • Don't Become Negative - Be professional and courteous. Remember, the lender does not have to remove late payments from the account.

  • Don't Be Impersonal - Find the specific department or person to address the letter to. The last thing a creditor wants to do is be nice for someone and remove late payments when they don't take the time to find out where it should go.

Where/How to Send the Goodwill Letter?

If someone has a late student loan payment, and it has been sent to the credit reporting agency already, make sure to send a hard copy of the letter. Though email is faster, some creditors don't accept it or may lose it. Type out the letter and send it in the mail. Also, phone calls are inappropriate. There's no record of the request to remove the late student loan payment from a particular credit reporting agency.

Don't send the letter to the billing department. Instead, call the number located on the student loan statement and ask where it should be sent. The statement address provided is sure to be for payments and not correspondence, though some may indicate different addresses. If the student loans came from a credit union or bank, consider delivering the letter to the local branch manager.

What to Expect After Sending a Goodwill Letter?

There is no guarantee that a person can get the creditor to remove late student loan payments from their record. However, it's a good idea to try.

The information has already been reported, so it may take time before the new loan information shows up on the report. Lenders must send back a letter stating if they are going to remove it from the loan and from the credit bureau agency.

What Happens to Your Credit

How Long Do Late Student Loan Payments Stay on a Credit Report?

Typically, a late student loan payment stays on a person's credit report for seven years. Even if the person chooses to make the payment later, but it's after the federal student loans have defaulted, there is no way to get it back off the credit history.

Consequences of Missing a Student Loan Payment

If the student loans are past the due date, this is what to expect:

  • After 30 days - The creditor can charge up to 6 percent of the missed payment amount as late fees.

  • After 90 days - The creditor is allowed to go to the credit bureaus at this point, and they often do. Late payments are reported directly to the bureaus on student loans.

  • After 270 days - A federal student loan goes into default. This triggers various new penalties, like wage garnishment, tax refund seizure, and collection costs that the person must pay back.


One thing that should never be done is to be late on a loan repayment. However, people are human, and this can happen for various reasons. If it does, make sure that it's paid back as soon as possible. Sometimes, that's impossible because it's already in default. Consider writing a letter of goodwill to the creditor and ask that it be removed. Many times, they are willing to do this, though it depends on the creditor and various other factors.

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