How you handle your student loans can have long-term consequences on several financial areas including your credit history. On time payments boost your credit score while late payments will damage it. But it’s not only your mistakes that impact your credit score. Student loan errors on your credit report can also affect your credit score adversely.

Do You Really Need to Look for Errors on Your Credit Report?

You don’t expect your credit report to have errors, but they do. Ignoring these errors is a mistake. Inaccurate entries in your credit report impact your credit score. This in turn can make it more difficult for you to get a credit card, mortgage or vehicle loan. If you do manage to get approved for a loan or credit card, you’ll pay a much higher interest rate.

Every year, many federal and private student loan borrowers find and report inaccuracies in their credit report. Don’t assume that your credit report is correct. It’s a good idea to check your credit report at least once or twice a year. It’s especially important to do this before applying for a loan or credit card.

7 Common Student Loan Errors to Look For

1. Student Loans Listed Multiple Times

One or more student loans may get wrongly listed multiple times on your credit report. This may happen when the credit bureau mistakenly records the same loan two or more times. Often, the duplicate loans will be named differently, which is why they go unnoticed.

Multiple listings of a single loan shows that you have more debt than you actually do. This can have a major impact on your debt-to-income (DTI) ratio. DTI ratio compares your monthly income to your monthly debt payments. This is one of the things lenders and credit card companies look at when evaluating your application. A high DTI ratio suggests that you may have trouble paying back your loan. Most lenders won’t extend you a line of credit. Those who do will quote less favorable terms and higher interest rates.

When checking your credit report, make sure the loans listed match your list of loans. And check that all loans are listed only once.

2. Closed Loan Accounts Listed as Open

When you finished paying off a student loan completely, the lender or loan servicer reports it to the credit bureau. That loan is then listed as closed on your credit report. Sometimes, there are reporting delays. The lender or loan servicer may report the final payment after several weeks or even after several months. Or they may forget to report it altogether. Until such time that the final payment is reported, the loan remains listed as unpaid or open.

When looking through your credit report, check that loans that are paid off are not listed on it.

3. Student Loans Inaccurately Listed Under Your Name

There are two ways student loans may get wrongfully listed under your name. The first may be due to a simple mix-up with another student loan borrower with a similar name or Social Security number. Because of the similarity in details, the lender may mistakenly list the other borrower’s information with yours.

The second reason may be an intentionally wrong entry by an identity thief. If a scammer opens a new account using your information, that account will get listed in your credit report.

Having an extra loan listed in your credit report increases your debt-to-income ratio and hurts your credit score. Worse, you may be held responsible for that loan.

You must make sure that the list of accounts in your credit report matches the list in your personal records

4. Student Loan Wrongly Marked as Delinquent or in Default

Federal student loans go into delinquency the first day after you miss a student loan payment. It goes into default if the payment remains unpaid for 270 days past due. Private student loans go into default much faster. The loan becomes delinquent if it is one day past due. It goes into default if it remains unpaid 120 days after it is due.

You pay a late fee fine and interest on the unpaid amount until such time that you pay the outstanding amount. In addition to the hefty fine and interest, delinquency and default also hurt your credit score considerably.

If you don’t have any loans that are in default or delinquency, make sure that none are listed on your report. Pay special attention to default or delinquency entries if your loans are in deferment or forbearance. In these cases, the lender has given you permission to pause payments. They should not be submitted to the bureaus as default.

5. Forgiven Loans Listed as Delinquent or in Default

This applies only to federal student loans. If you meet the federal forgiveness program requirements and your federal student loans are forgiven, they should be removed from the report. Forgiven student loans are still being listed as open on the credit report can hurt your credit score.

When going through your credit report, make sure that only active loans are listed.

6. Student Loans Not Shown

At last! A student loan error in your favor. Or at least it appears to be in your favor. If your student loan is not listed in your credit report it may seem like a good thing. After all, the fewer loans that are listed, the lower the loan repayment, right? It’s also great for your debt-to-income ratio as it looks like you have smaller debt than you actually do. Getting approved for loans and credit cards will be a breeze.

The truth is, you cannot and should not ignore a student loan that’s not listed on your credit report. Just because it doesn’t show up on your credit report, doesn’t mean it’s written off or disappeared. Your loan hasn’t gone anywhere. It’s still there and you are still responsible for it, regardless of whether or not it’s listed on your credit report.

It simply means that your lender or loan servicer forgot to report it to the credit bureaus. Or maybe they reported it to another student loan borrower’s account in a case of mistaken identity. When the lender realizes their mistake, they will correct it and list it on your credit report. Meanwhile, if you haven’t been making payments on your loan, you’ll end up paying thousands of dollars in late fee fines and interest.

7. Student Loan Details are Wrong

This is a surprisingly common student loan error. Your student loan entry may have the wrong start date or the wrong amount. Or the balance on the credit report may be higher or lower than what you owe. These details can affect your credit score calculation. It’s a good idea to check that all student loan information entered in your credit report is correct and complete.

How To Dispute a Student Loan Error on Your Credit Report

The first thing you need to do is obtain a copy of your credit report. You’re entitled to a free copy of your credit report from each of the three major credit bureaus once a year. You can apply for your free copy at AnnualCreditReport.com.

Go through your credit report thoroughly and make sure that all the details match up with your notes. Check the number of credit accounts listed, the status of each account and the outstanding listed against each. Make sure that all loan repayments are reported and that your contact details are updated.

As you go through your reports, make a note of any errors. Contact your lender first and try to get the error corrected. If it doesn’t get resolved, file a dispute with the relevant credit bureau. If there are multiple errors, you’ll need to file a separate dispute for each one.

Credit bureaus are legally required to investigate every dispute and resolve the matter within 30 days. On completing their investigation, they must send you a letter explaining their conclusion and what needs to be done next.

If your problem is not resolved, you can file a complaint with the Consumer Financial Protection Bureau. They will investigate your complaint further.

Final Thoughts

Going through your credit reports can be time-consuming and tedious. But it must be done to prevent even bigger problems down the road. Think of it as financial housekeeping and make it a habit to check for student loans on your credit report at least once a year. Remember, the earlier you catch an error, the easier it will be to resolve.