How to Keep Student Loan Forbearance From Hurting Your Credit

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The federal CARES Act was passed in March 2020 and extended in January 2021 to help people who have suffered financially because of the coronavirus pandemic. It includes a provision that lets people suspend their payments and interest on student loans through September 30, 2021.

If you’re taking advantage of this part of the financial relief program, money expert Clark Howard wants you to be aware that — through no fault of your own — your credit could take a major hit.

Why You Need To Check Your Credit Reports if You Have Student Loans

“We are hearing from a huge number of people writing into our Team Clark Consumer Action Center who have federal student loans,” Clark says.

These people can stop making payments on most federal student loans for six months, and there will be no interest charged during that period.

“So why — with something that sounds so good — are we hearing one complaint after another? Because the loan servicers have messed this up to the max,” Clark says.

“They’re destroying people’s credit by listing people as delinquent on their student loans when they’re not even being billed for them right now and they’re not required to make any payments at all. Everyone is supposed to be considered to be current.”

So, what do you need to do to preserve your credit?

First, you want to see if Equifax, TransUnion, and Experian show you as delinquent on your loans. Right now, because of the pandemic, you can get a free copy of each of your credit reports once a week instead of just once a year.

Go to to see how your payment status is being reported on those student loans.

If any of the reports show you’re delinquent, contact your student loan servicer and tell them that reporting you as delinquent is not allowed under Section 3513(d) of the CARES Act.

Relevant Portion of the CARES Act
Relevant Portion of the CARES Act

Next, you do the same thing with Equifax, TransUnion, and Experian.


In all cases, make sure that you write down the name of anyone you speak with. Also, record the time and date you spoke with them.

Clark says doing these things will help you avoid big trouble with your finances.

“It’s important to take these steps because the hit to your credit score can be absolutely massive,” he says. “All kinds of things can go wrong. If you have a home, your homeowner’s insurance rates can skyrocket. If you have a vehicle with auto insurance, your rates will skyrocket because of a decline in credit score like this. So, you’ve got to get on top of this right away.”

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