There are several reasons a student loan account might be reported as closed. Some reasons may need your attention, while others aren’t a cause for concern.
You paid off or refinanced a student loan and now it’s not on your credit report.
Paying off a student loan closes the account on your credit report. Since you’ve finished paying off your debt to that creditor, there’s no need for it to remain active on your report. Consolidation and refinancing, on the other hand, pay off your student loan debt with one creditor but give you a new loan with the same or different lender in exchange. Note: your lender will make a hard inquiry on you and your cosigner’s credit report if you refinance.
You defaulted on your student loan debt a while ago and suddenly it fell off your credit report, does that mean you don’t owe anymore?
If you fail to make on-time payments, the federal government and private lenders will report a default status to the major credit bureaus. From there, the late payment history will remain on your report for 7.5 years. After that it will fall off but it does not mean you are off the hook.
It’s important to know that even though the credit bureaus aren’t tracking them anymore, your loan servicer still is. We delve more into this at the end of the article including ways to help you get out of default.
The credit bureau made a mistake.
Mistakes happen. Sometimes your education loan may show that it’s closed even though you’re still paying on it. When that happens, you can file a dispute with the credit reporting bureau to have your account put back on your report. You’d only want to do this if you had a positive payment history. Bringing back negative information can ruin your good credit.
Is a student loan account closed due to inactivity? Unlike credit cards and other revolving accounts, student loans are never closed due to inactivity. Deferment, forbearance, and $0 monthly payments under an income-driven repayment plan all keep your account active even if you’re technically not paying.
