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Student Loan Defaulted
If you have defaulted on your student loan, you will likely to have to repay this debt and your credit will be ruined. This will put you in a difficult position.

The government can garnish your wages, your social security benefits and more. Your account is sent to collection agencies and various collection efforts begin.

According to a law that Congress created called the Fair Credit Reporting Act, you only have a negative mark on your credit report for a maximum of seven years. Although, these debts can be collected upon for life!

With this on your report you are likely to have to pay interest rates of roughly 25% and place large down payments, just to be approved for new credit. More often than not you will be turned away.

You should dispute the collection marks on your report. There is hope you can remove this mark and, with some luck, you may be able to remove the debt entirely.

You should send a dispute letter to each bureau; in your letter provide an explanation as to why the mark is not accurate. For example; it has been reported for seven years already, not my account, account is paid in full and so on.

This is the most difficult item to negotiate and thus we suggest that you should hire a credit repair service to dispute it on your behalf. The benefit is you will have a licensed attorney fighting for you and there are continuously new laws passed by congress to help protect consumers.

We feel hiring an expert is worth the money since your credit score impacts every aspect of your life. This is a good idea since, compared to the high cost of a low credit score, hiring an expert can be done at very reasonable rates.

Understand that government loans, such as a Stafford loan or the Perkins loan, will be much harder to eliminate from your report. A private loan, such as Sallie Mae, will be easier to remove than a federal loan, but still difficult.

The creator of the negative mark will be contacted by the bureaus and asked to verify the debt, including that the account is yours, the balance of the account, and that the dates are correct. This will take place as soon as the bureaus receive your dispute letter.

If the account can not be verified then the negative mark must be removed from your credit report. This is due to the Fair Credit Reporting Act saying that any unverifiable mark on your credit report must be removed.

If this mark is in error then send any documentation that you have with your dispute letter to prove it is in error. The bureaus make errors all the time and so do the lenders, but your credit is the one that will suffer. It is estimated that 1 in every 4 people have an error on the report that is costing them money in higher interest rates.

In closing, if you have a defaulted student loan on your report, it does not mean you will have a low score for the rest of your life. The are removed from reports every day. To do this, we suggest you dispute this mark with the bureaus.


Article Title : Student Loan Defaulted
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Education is one of the most basic right of any human, but with the increase in prices and the costs involved in education this has made these rights turn into a privilege which very few can enjoy. Any normal person today in the whole of United States has to take an education loan at one point of time to pay for their education fees.

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Schools Will No Longer Receive Paper FAFSA Forms
(September 20, 2007)

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