Dear Dr. Don,
I had a loan from a credit union for my car and had auto insurance. I wrecked my car, but since it was insured, I thought it was completely covered. Four months later, the credit union contacted me to tell me I missed a payment. Apparently, the day before the wreck I received the bill for that month’s payment. The missed payment showed up on my credit report. Once I was told about my delinquency, I paid off the loan immediately.

After that, I was turned down for student loans. I’m halfway through school and want to continue. My credit report notes that the delinquency has been paid in full. Will this stay on my credit report for seven years? Or, can I get it removed from my record? I can’t wait seven years for this to drop off my credit report to go back to school.

Thank you,
— Justin Junior

Dear Justin,
I understand your situation. I destroyed a new car before the first payment was due. Who else would buy two new Renault Alliances in a month? The difference is that my credit union didn’t wait four months to tell me I still had to make the payments until the insurance claim was settled. You might try explaining your situation to the credit union to see if they will remove the delinquency from your credit history.

With credit histories, time heals all wounds. A missed payment stays on your credit report for seven years. But as time passes, your credit score rises if you aren’t really late on any other payments.

Stafford and Perkins federal direct student loans are available. Qualifying for them isn’t dependent on your credit score. You do, however, have to file a free application for federal student aid, known as FAFSA. Private student loans should be available if you have a willing co-signer with a good credit history.

Every time you apply for credit, it creates a credit inquiry on your credit report. Multiple applications for student loans made in a short period of time, such as two to four weeks, are treated as a single inquiry and won’t have much impact on your credit score.

If you haven’t done so, speak with your school’s financial aid office about the situation. I’m sure there are other students who have faced similar challenges.

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