Dispute duplicate student loans entries on credit reports

Opening Credits columnist Eric Sandberg
Erica Sandberg is a prominent personal finance authority and author of "Expecting Money: The Essential Financial Plan for New and Growing Families." She writes "Opening Credits," a weekly reader Q&A column about issues for people who are new to credit, for CreditCards.com.

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Question Dear Opening Credits,
I have read not to worry about multiple credit report entries of student loans. I have had ownership of student loans switched or sold, etc., over the past seven years. Currently, I have two loans with Navient, but 36 are being reported to TransUnion. And when I tried to get an equity line of credit from my paid-off home, Bank of America specialists did not understand why there were so many lines of credit even though I argued they were all the same, they just had changed hands. I was denied the loan. This has happened with several lenders now, so I think people should be aware of this. – Wen


Dear Wen,
You are right that what lands on your consumer credit report matters! All the information needs to be accurate and listed in the precisely the right way. Lenders and others with a legitimate business purpose access these files so they can make accurate judgments about credit applicants. If the reports aren’t right, no one benefits.

You are also correct that when loans are sold from one financial institution to another, that information can clutter a credit report. However, what you have to do is make sure all that information is accurate. If a debt is purchased many times over, that trail of activity can appear on your reports because it is true. However, if it is duplicate information – meaning the same loan is posted more than once by the same lender, it shouldn’t be listed as multiple accounts. This is what may be happening in your case, and you need to take steps to remove any excess line items from your reports. After all, while you know you don’t have 36 outstanding loans, some lenders may not pay close enough attention to the details. It’s also possible that credit scoring systems won’t catch the error, either, and may lead to falsely low credit scores.

The Fair Credit Reporting Act protects consumers against the misreporting of data on a credit report, and that includes duplicate listings. In fact, the act requires credit reporting agencies – TransUnion, Experian and Equifax – to have procedures in place to ensure accuracy. Yet as you’re more than aware, mistakes slip through.

If it is truly duplicate listings of the same loan, it’s time to notify the credit reporting agency and file a dispute. You need not contact all of the big three credit reporting agencies -- just one, and it will update the other two. Once received, the agency will have approximately 30 days to review your dispute. It will also contact the lender(s) providing the data, requesting that they verify the accuracy of the information. Some disputes can be tough to correct, but this one should be fairly simple. Just point out that same loans are appearing multiple times and that should be rectified quickly. When it is, you’ll receive an additional free credit report with the changes, and you can go back to Bank of America or any other lender with proof you are not the owner of 36 student loans after all.

Oh, and here’s a tip: Don’t use the online dispute form provided on the credit reporting agency’s website. Instead, submit your dispute in writing to the agency, including your credit report with the duplicate accounts clearly highlighted. Mail the entire packet certified mail, return receipt requested. Not only will you be establishing a paper trail and know for sure that it went into human hands, but you’ll avoid having to agree to the arbitration clause in the online dispute agreement, which prevents people from taking the agency to court.

If you are not satisfied with the results of your dispute, you can always turn to the Consumer Financial Protection Bureau to file a complaint. According to the CFPB, the response time for a dispute is generally 15 days. You can file your complaint by clicking the student loan tab, which will send your concern directly to the lenders reporting your loans, or the credit reporting tab, which will go directly to the credit bureaus.

Finally, if your loans were truly bought and sold 36 times to 36 different lenders, the good news is that paid-off or transferred loans should disappear from your credit reports after seven to 10 years from the date of last activity.

Good luck!

See related: 5 mistakes people make when disputing credit report errors

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Updated: 02-21-2019