How Does a Deferred Student Loan Show Up on My Credit Report?

| Tedis Baboumian |

There are times when making student loan payments is a hardship. Deferring your student loan payments allows you to postpone making payments on your student loan if you haven’t been able to find a job, have medical problems, or have trouble making ends meet for any other reason.

You may also want to take a deferment if you go back to school at least part-time or because of active military service. If you’re considering deferring your student loan payments, you may be asking yourself, “How does a deferred student loan show up on my credit report?”

What Happens to Your Credit During Deferment?

It’s a smart move to worry about your credit before you decide to defer your payments. The good news is that deferring your payment won’t harm your credit since your lender agreed to let you postpone making payments for now. The deferment will be noted in your credit report, but it won’t bring down your credit score.

One thing to keep in mind is that your loan may still be accruing interest even though it’s in deferment, which makes the total amount you have to pay back higher. If you’re unemployed or having financial hardship for other reasons, you can defer payments for up to three years. If you’ve gone back to school, you may be able to defer your loan payments while you’re still in school.

Timing is Important

It’s important not to wait until you’ve already missed payments before reaching out to your lender to find out about your options. If you wait, the damage will be done to your credit because of late payments or missed payments, not because you’ve gone into deferral. If your loan is more than 270 days past due, you’re no longer eligible for deferring payments.

Another factor that can affect your credit is the age of a loan. Deferring your payments can make it take longer to pay it back, and during the time you’re not making payments, your debt isn’t getting any smaller.

Considering Your Options

Contact the lender servicing your loan to find out what options you have if you’re struggling to make payments on your student loans. Private loans may or may not be eligible for loan deferment. Another possible option is refinancing your loans so that they have a lower payment.

If you apply for a deferral, you’ll need to submit proof of hardship. After the application is submitted, keep making payments on your loans until you’ve been notified that your request has been approved.

Protect Your Credit

Whether you decide to defer student loans or not, taking care of your credit should be a priority. At least once a year, review the information on your credit reports and make sure there are no errors regarding your student loans or any of your other outstanding credit. Any errors you find should be disputed immediately. Want help with this process? Correcting mistakes on your credit report doesn’t get any easier than when you use Dovly’s AI credit engine that will help you find and fix errors. Try it risk-free with our free membership tier.

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