Your credit score is used to assess your eligibility and determine interest rates for home, auto, and other loans; eligibility for apartment rentals and credit card applications; and even eligibility for some jobs. You could say it’s a pretty important number in your life, and one you want to keep a close eye on to ensure it’s a true reflection of your financial ability and habits.

Back in March and April, several people with federal student loans were disheartened to see their credit scores drop despite being current and on-time with their loan payments. It came to light that at least one major student loan processing company (Great Lakes) had mishandled the federal student loan debt relief measures under the CARES Act, which was implemented in response to the COVID-19 pandemic, leading to millions of wrongly damaged credit scores.

Here’s what happened

Under the CARES Act, federal student loan payments were to be paused from March 13 to September 30, 2020. Borrowers would not be required to make payments on these loans, interest would not continue to accrue, and their credit scores would remain unaffected. The U.S. Department of Education told student loan servicers like Great Lakes to report the paused payments to the credit agencies (Experian, TransUnion, and Equifax) as if borrowers owed a $0 monthly payment, had paid it, and were current on their loans.

However, due to a coding error by Great Lakes, as many as five million federal student loan borrowers were marked as having deferred loans (rather than lawfully paused), which can affect credit scores. The error was discovered on May 11, and Great Lakes publicly acknowledged the mistake. They worked to correct the error retroactively, providing updated files to each credit bureau, although it would take additional time for each bureau to update their own reports, and by this time, some borrowers had already applied for mortgages, apartments, and other loans and had suffered from their inaccurately lowered scores.

What you should do

If you want to know if your score was impacted, check your credit report. You can go to for a free copy of your credit report from all three major credit bureaus. Usually you can only receive one free credit report per year per bureau, but during the pandemic, you can access your report directly through each bureau’s website for free once per week through April 2021.

If your credit score was damaged after your federal student loans were paused by the government, contact the Student Borrower Protection Bureau for next steps, or contact your student loan processor directly.

Your FICO credit score should not have been affected because it does not take into account deferments in its algorithm.

Remember, student loan forbearance through the CARES Act only applies to federal student loans. All private student loans are still required to be paid on-time and in-full, unless you’ve made other arrangements directly with your student loan servicer.

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