Will being one month behind on student loans greatly affect my credit reports?
July 25, 2010 9:28 AM   Subscribe

Will being one month behind on student loans greatly affect my credit reports?

I recently consolidated all my student loans and later, set them up for automatic withdrawal. I noticed a few days after each withdrawal, I would get an e-mail (and later, a paper letter) stating that I was delinquent. Huh? The response I got when I e-mailed them was, "You didn't make a payment in April." I checked my bank account and they were right. April was a whammy in most areas you can think of, so it is understandable how this could've happened. My credit is OK, not terrific and not terrible. I have been working hard the last few years to raise my score and so on. How much will being a month behind impact my credit?

Coming up with an extra month's payment would be a hardship as I am just barely making it now on my salary. (I'm thankful to have a job.) No sympathetic relatives to ask, either. If I have to do it, I will somehow.
posted by anonymous to Work & Money (8 answers total)
 
Call the student loan place back, they can tell you when a deliquency is reported to the credit bureaus. When I worked in collection, it was 60 days past-due for federally backed student loans, but that was about 5 years ago. Anything under 60 was just "stern letter" territory.
posted by synaesthetichaze at 9:36 AM on July 25, 2010


In other words, there's a good chance that the answer is "not at all."
posted by synaesthetichaze at 9:36 AM on July 25, 2010


Be careful that they don't apply the payment you sent in May to April, then making your payment for May (which you sent in June) late, etc... if that makes sense. You might want to call them and work out a plan to catch up (perhaps by spreading out the missed payment over the next few months) so that you aren't permanently in a state of being one month behind.
posted by pants at 9:54 AM on July 25, 2010


If you can't afford to make an extra payment, ask for a short deferment, then you can catch back up, otherwise you're going to keep getting these notices. You are allowed to make payments even while you're in deferment.
posted by bluejayk at 10:04 AM on July 25, 2010


Payments which are 30 days late don't affect your credit history as much as later payments, assuming that you don't have a history of making late payments.

Of course, if you do have a history of making late payments, then other late payments do affect your payment history.

In short, make paying your bills on time a priority. Over time your credit history will improve.
posted by dfriedman at 10:34 AM on July 25, 2010


They can report, at least as far as the credit bureaus are concerned, as soon as you are thirty days late on a payment. Less than that and it doesn't count.

As has been mentioned, 30 day lates aren't as terrible for your score as 60 or 120 day lates, but they do have a big impact and can lead to adverse action by other creditors. A string of 30 day lates is certainly to be avoided.
posted by wierdo at 11:32 AM on July 25, 2010


Go to CreditKarma.com and find out what your score is now, then continue to watch it on a regular basis.
posted by kindall at 2:28 PM on July 25, 2010


My experience applies to Sallie Mae; if your loans are not federal loans and/or not administered by Sallie Mae, this information may not be completely accurate.

First of all, you say that you are currently having some difficulty managing your loans. You may have options to change up how much you pay per month. This helpful guide explains your payment options; note that Income Based Repayment may be your best option if your income is low and your student loans are a large percentage of your monthly obligations.

You can likely also find descriptions of these options in the loan paperwork that your lender sent you when you consolidated (I'm pretty sure Sallie Mae did so when I consolidated, and there's a lot more helpful information in those thick piles of papers than you might think).

As for your late payment in March, yes please do call your lender! I find them frustrating to talk to, but you absolutely need to make sure that your payments are current. In my case, I accidentally missed a payment to Sallie Mae (I think I moved or something) and they charged me a small penalty fee (which was added on to next month's bill) and they explained that they do not report late payments to a credit bureau until the loans are 120 days late.

This does not match what Sallie Mae says on their website, but I just checked my paperwork from them that had to do with the late repayment and it says they 'may report' to credit bureaus. It's not automatic, and at 30 days late I don't think (based on my experience) it's super likely. If, however, you are still in arrears, then yeah your credit report is probably feeling the pain. I do not have any notations from Sallie Mae on my credit report, fyi.

In sum, please call them. You may be able to reduce your payments, but you definitely need to make sure that you are current.
posted by librarylis at 12:04 AM on July 26, 2010


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