Negative accounts, even paid defaulted loans can remain on your credit report for seven years from the original date of the first missed payment that led to the defaulted off status.
QUESTION: So if I finished paying my students loans last year in March. But they are showing up on my report as one month terms, 120 days or more late, and garnishments. Do I contact the student loan people or credit bureaus for the status updates?
ANSWER: The balance amount should show $0 and state “Paid” on your credit reports. Paid defaulted students loans will eventually reflect positively on your credit history and scores over time. For now, the positive aspect is that it is a debt no longer owed.
Unfortunately, the default and negative notations can remain including the past late payment history and garnishment for 7 years from the original delinquency date. If your student loans became delinquent less than seven years ago, they still can still appear in your credit history.
You can write a dispute letter directly to the student loan lender requesting that the account be updated to paid; and, include in your letter a request for the past negative information be deleted. While they are not obligated to delete accurate negative information it doesn’t hurt to request a “goodwill” deletion of the negative history on the account since it is now paid in full.