How to Remove Forbearance From Your Credit Report

Loan forbearance offers a temporary reprieve for individuals facing financial hardship, allowing them to pause or reduce loan payments for a specified period. This arrangement, typically made directly with a lender or loan servicer, can provide breathing room during unexpected challenges. While designed to assist borrowers, its presence and accurate reflection on a credit report can be a concern.

How Forbearance Appears on Your Credit Report

Loan forbearance can be noted on your credit report in various ways, reflecting the agreement made with your lender. An account in forbearance generally means payments are temporarily suspended or reduced, though interest may continue to accrue. This affects the total amount owed after the forbearance period concludes.

Federal legislation introduced guidelines for credit reporting during forbearance periods. If a borrower’s account was current when they entered a forbearance agreement, the lender generally had to report the account as “current” throughout the period, provided the borrower fulfilled the terms. If an account was already delinquent before entering forbearance, the lender could continue to report it as delinquent unless the borrower brought the account current. Lenders may also use special comment codes, such as “CP” for forbearance, to provide additional context on the credit report.

Accessing and Reviewing Your Credit Report

To understand how forbearance is reflected on your credit history, regularly access and review your credit reports. Federal law grants consumers a free credit report once every 12 months from each of the three major nationwide credit reporting companies: Equifax, Experian, and TransUnion. The official source for obtaining these reports is AnnualCreditReport.com. You can request your reports online for immediate access, or by phone or mail.

When reviewing your credit reports, carefully examine each account under a forbearance agreement. Look for the account status, which should indicate “current” if your account was up-to-date before forbearance and reported under federal guidelines. Pay attention to any special comments or remarks associated with the account, as these might explain the forbearance status. It is advisable to review all three reports, as information may not always be identical across Equifax, Experian, and TransUnion. Comparing the details across all reports helps ensure consistency and identify any discrepancies.

Correcting Inaccurate Forbearance Reporting

If you discover inaccurate forbearance reporting on your credit report, you have the right to dispute the information with both the credit reporting companies and the original lender or loan servicer. The dispute process can be initiated online, by mail, or by phone directly with each credit bureau reporting the incorrect information. When submitting a dispute, clearly explain what you believe is wrong and why, providing specific details about the account.

Gathering supporting documentation is an important step in the dispute process. This may include copies of your forbearance agreement, loan statements, written communication with your lender regarding the forbearance, and records of your payments before and after the forbearance period. When sending documents, always provide copies and retain your original records. Credit bureaus typically have 30 to 45 days to investigate your dispute and notify you of the results.

In addition to disputing with the credit bureaus, you should also contact your lender or loan servicer directly. They are required to investigate disputes and correct any inaccuracies they reported. Providing them with the same supporting documentation can expedite their review and correction process. If a dispute is denied or not resolved, you have further options, such as requesting a brief statement of dispute be added to your credit report or filing a complaint with the Consumer Financial Protection Bureau (CFPB).