The CARES Act — a federal stimulus bill passed in response to the COVID-19 pandemic — provides for significant student loan relief. Specifically, the legislation suspends payments, interest, and collections on government-held federal student loans from March 13, 2020 to September 30, 2020. The suspension is automatic, meaning borrowers did not have to take any affirmative steps to obtain the relief. Their student loan accounts were simply placed into forbearance, and billing was suspended. The CARES Act payment suspension is not supposed to have any adverse credit consequences. The months of suspended payments are supposed to be counted towards federal loan forgiveness and rehabilitation programs, as if the borrower was still making normal monthly payments. The U.S. Department of Education has confirmed to the media that a borrower’s credit should not be impacted by the CARES Act forbearance.

A student loan borrower from Queens, New York, was surprised to find out that this credit score had dropped by 100 points after his federal student loans serviced by Great Lakes Higher Education were automatically placed into a forbearance. These borrowers’ student loans are in good standing, and no payments are due. So, what is going on here? Why are their credit scores dropping? Despite this, some student loan servicers appear to be reporting the student loans as delinquent or in a non-payment status to national credit bureaus.

Student Loan Servicers Promise to Update Credit Reports:

On May 14, 2020, Great Lakes released a statement stating that it is working with the major credit reporting agencies to accurately report the status of student loan accounts. The servicer did not admit to any wrongdoing, stating, “We do not believe our reporting has impacted actual consumer credit scores.” This, of course, directly contradicts the experience of many student loan borrowers.
UPDATE: On May 20, student loan borrowers filed a class action lawsuit against Great Lakes and the major credit bureaus (Equifax, Experian, and TransUnion) in federal district court for alleged violations of federal and state law related to the erroneous credit reporting.

What to Do About Inaccurate Negative Credit Reporting:

Borrowers and other consumers have important legal rights under the Fair Credit Reporting Act (FCRA). Credit Services of America has the right service for you. We have a step by step program that will address all your concerns with a valid timeline to set proper expectations. Credit Services of America will verify that the bureaus are properly reporting items posted on your account:

• First, if you are unsure whether or not your student loan status has been reported accurately to credit bureaus, we will assist you in pulling your credit report.
• If we see inaccurate negative information on your credit report, we will begin disputing these items immediately. Credit Services of America has personalized disputes to assist you in removing negative items from your account.
• Credit Services of America will contact all three credit bureaus. (Equifax, Experian, or TransUnion) to ensure that all items are challenged. We specialize in handling the request of removal and correction of the incorrect reporting.
• Get Help! The FCRA does provide consumers with the right to sue a lender, servicer, or credit bureau in certain situations involving erroneous or inaccurate credit reporting, but Credit Services of America has helped thousands of clients dispute and remove erroneous items that are negatively impacting your credit. Calls us today 844.349.8727 or