The CARES Act automatically placed some federal student loans in forbearance without accruing interest from March 13, 2020 until September 30, 2020.
The law suspended required payments, accruing interest, and placed collections on hold for some federal student loans.
The law also stated that borrowers are not to have any adverse credit consequences. The months of suspended payments are supposed to count towards federal loan forgiveness programs. Borrower’s credit should not be impacted by the law.
However, some student loan providers have reported borrowers as delinquent or in a non-payment status to the national credit bureaus. You need to take action to fix this. Low FICO scores or dings on your credit reports affects your credit, charges higher interest, and ultimately costs you more money.
First, get your free credit report. You get one free credit report annually from each of the three major credit bureaus. Due to COVID 19, you can access free weekly credit online reports through April 2021. The website is www.annualcreditreport.com.
If you want more information about FICO scores and credit reports, check out my video, “FICO Scores”. https://youtu.be/EeP2rewWmSg
Second, contact your lender to report the error. Have them correct the report and send updated info to credit bureaus.
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