If you’ve defaulted on a student loan, you may get phone calls from a company called NelNet Collections or you may discover them on your credit report when you’re checking your creidt.
Either way, it’s not good for your credit score and it’s important to remove NelNet Collections from your credit report. It’s not as overwhelming as it sounds.
Dealing with Phone Calls or Letters
NelNet Collections will likely call you or send you a letter regarding your default. They probably won’t be nice (most collections agencies aren’t), but don’t let that deter you.
First, make them aware that you understand the Fair Debt Collection Practices Act and that they can’t call you outside of the hours of 8 AM and 8 PM. They also cannot harass you at work or make you feel harassed in general.
If they contact you via phone, ask them to communicate with you in writing, and you should do the same.
Write a Debt Validation Letter
Your first step (within 30 days of them contacting you) should be to write a debt validation letter. This is basically a request for proof that NelNet Collections has the correct person, the right debt, and the right to collect in your state.
Ask them for information including the account number, creditor name, amount defaulted, and last payment date.
The idea is to see if they truly have your debt or if they’re trying to scam you. Typically they can validate debts, but if they can’t, the credit bureau must remove it from your credit report.
Dispute the Debt
If they validate the debt or you miss the chance to ask for it, you can dispute the debt directly with the credit bureau. First, find out which credit bureau they reported to. You can pull your free reports here from TransUnion, Experian, and Equifax.
Once you know who reported it, write to them disputing the debt. You’ll need proof of why you’re disputing it. Look for:
- Incorrect account numbers
- Incorrect payment dates or amounts
- The wrong balance amount
- Misspelled names
Any mistakes you find you can dispute. You can also dispute the debt if NelNet can’t validate it but they refuse to remove it from your credit report.
We recommend doing this in writing via mail.
Make a Payment Arrangement
Your final option is to pay the debt (you’ll always end up in at some point) but in exchange for NelNet collections to remove their tradeline from your credit report.
Get this agreement in writing if they agree. It may take some back and forth because first, you must agree on a settlement amount. The nice thing is they bought your debt for pennies on the dollar. They hope to get you to pay the full amount, but they have wiggle room if you negotiate. The key is to negotiate, though.
Before you talk to them, get your finances in order. How much can you afford to pay? Start there, or start at a lower amount if they counteroffer. You want to be able to pay the debt in full (the agreed amount). In exchange, you’ll ask them to delete NelNet Collections from your credit report.
Get the agreement in writing. Without it, nothing holds them to the agreement to delete it from your credit report, which is the whole point of this process.
If NelNet stays on your credit report, it hurts your credit score and your chances to get future credit. Lenders don’t like to see unpaid collections. The pay-for-delete agreement solves both problems and helps you secure future credit.
Don’t let NelNet Collections scare you. They may sound tough and like they have something over you, but they don’t.
Know your rights according to the Fair Debt Collections Practice and don’t let them take advantage of you. They may try to sound scary or like you’re in a lot of trouble. You aren’t and you have rights. While you should pay your debt (everyone should), if you had financial trouble, it’s not your fault.
Make good on the debt the best you can now by asking NelNet to remove their tradeline from your credit report. Your credit score already suffers from the defaulted debt it originated from, there’s no sense in having a collection account ruin it too.