All About Student Loans & Credit Reports

How long a student loan can appear on your credit report depends on whether it is a federal loan or a private loan. Let us look at the rules for credit reports.

Credit Report Rules & Student Loans

Federal law (US Code Title 15, §1681c) controls the behavior of credit reporting agencies. This law is known as the Fair Credit Reporting Act (FCRA). Under FCRA §605 (a) and (b), an account in collection will appear on a consumer’s credit report for 7½ years. The clock starts approximately 180 days after the date of first delinquency on the account. To learn when an account will be removed by the credit reporting agencies (TransUnion, Equifax, and Experian and others), add 7½ years to the date of first delinquency. Subsequent activity, such as resolving the debt, is irrelevant to this rule. The seven-year rule does not apply to all debts, however. Here are four exceptions:

• A tax lien can appear for seven years from the date of payment.
• A bankruptcy will appear for 10 years from the date of the final order.
• Federal student loans can be reported for as long as they are delinquent. (Private student loans follow the 7½-year rule.)
• A civil judgment can appear for seven years, or the length of a judgment’s statute of limitations in the consumer’s state, whichever is longer.

Learn the lifespan of a judgment in your state at the Bills.com Statute of Limitations Laws by State page.

The start of the seven-year begins at the date of first delinquency, or if no payments are made, when the first payment was due. Review your credit report carefully to make certain the dates of first delinquency are reported correctly. Unscrupulous collection agents reset the date of first delinquency to stretch out how long a derogatory account appears on consumer’s credit report. This is illegal under the FCRA.

Just because a debt does not appear on a credit report does not mean the statute of limitations for the debt has passed. The opposite is also true: The passing of a state statute of limitations on a debt does not mean the debt may not appear on a credit report. The federal FCRA and state statutes of limitations are separate and independent of each other.

Whether a debt appears on a credit report does not establish legal liability for the debt. The opposite is also true: You may have legal liability for a debt not reported to the credit reporting agencies. Credit reports are not legal records of every debt a person owes.

Dept. of Education & Credit Reports

According to the Dept. of Education Web page Repaying Student Loans Held by the U.S. Department of Education, to get a negative credit report made by the Department removed, you must successfully complete the Dept. of Education’s loan rehabilitation program.

As we mentioned above, a private student loan is treated no differently from other private consumer debt. In other words, the 7½-year rule applies.

Your Question

You did not mentioned if the student loans in question are federal or private. If the student loan is federal, the derogatory report can appear for 7 years after the loan becomes rehabilitated. If the loan is private, the derogatory can appear for 7½ years after the date of first delinquency.

You mentioned “date of last activity.” That is not accurate when referring to what appears on a credit report. The rule concerns the date of first delinquency, which is typically 30-60 days after the payment due date.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com