New Bills Would Reshape Credit Reporting For Private Student Loan Borrowers And Other Consumers – Forbes
Congress is considering multiple new bills that could dramatically overhaul credit reporting for private student loan borrowers and other consumers.
One bill, the Comprehensive Consumer Credit Reporting Reform Act, would create a private student loan rehabilitation program that would allow borrowers in default on their private student loans to restore their loans to good standing through a series of on-time monthly payments. Private student loan lenders would then be required to remove any adverse credit reporting from the borrower’s credit report following the successful completion of the payment sequence. Currently, student loan rehabilitation is available only for federal student loans; private student loans effectively have no option to reverse or cure a default. Even paying or settling a defaulted private student loan would not necessarily result in a deletion of the prior negative credit reporting.
The Act would also overhaul the credit dispute process for erroneous credit reporting, and expand access to credit scores at no cost to consumers. It would also mandate the removal of negative credit reporting associated with predatory mortgages and predatory private student loans used to attend for-profit schools.