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Student Loan
I have 90 date late on one of my student loans. I will have this loan paid in full in the next few months. Once the loan is paid in full, will the lates be removed from my CR? I applied for a CC and in the letter explaining why I was denied it said a 90 day late on an account with a balance greater than $200 so that is why I am asking if paying it all off makes a difference or not.
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1 Reply
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Once a loan has been fully paid off but one still sees a late payment recorded against them, they can only delete this late payment record once it reaches its expiration time of about seven years. A question may arise regarding how this might impact one’s credit report. Before proceeding to answer such questions, let us look at some important points to consider:
If the loan is paid off, it doesn’t improve one’s credit score but only reflects on one’s overall credit profile, which benefits them in the long run. This is especially useful when recovering from a bad report or score.
An alternative approach can be made: After repaying the loan, you can request a goodwill adjustment to your credit report. In such cases, late payments can be forgiven, such as due to a previous clean history of payments.
Although lenders usually comply with Godwin adjustments, many still have their reporting practices, which may cause dislocation to credit scores.
In cases where credit repair late payments consistently damage your credit score, in the case of a credit report, one can forgo the credit report for loans. Yes, this can be time-consuming, but it can save you lots of trouble.
To sum up, paying off the loan is good. However, setting expectations concerning deleting the late mortgage repayment from the credit mortgage records is essential.