Take the collet fully apart and clean out all sawdust and other debris. Does this happen on all i/4 shank bits? use only quality bits preferably American bits. I use Whiteside and Amana, Cmt is a good bit. If it does not hold any 1/4 bit replace collet. To my knowledge Sears has never made a router, they just sell them. It's possible it was a Skill, a Black and Decker, or some other common brand with a few specs that Sears had them made with (good luck with that). Check router forum.com
other people have looked for collets, there is many suggestion or answers. t site has them, but it does not specify 1/4 or 1/2
OEM Craftsman Router Collet Asy 2823121000 Ships Today Fix com
It is supposed to be self extracting, meaning that if you turn the nut far enough, the bit will pop up; no need to remove the nut. If the bit is stuck, try to pull it out with pliers. You may even need penetrating oil. Probably just rust; there is not much that go wrong. Good luck. I’m happy to assist further over the phone at https://www.6ya.com/expert/bill_f6ca18ca1db028ed
it is not tension you adjust but parallel running of the front pulley
normally there is a knob along the arm that you can move in or out carefully and you will see the belt run back to covering the pulley
best do it when you spin the belt by hand as the adjustment is touchy
Maybe this will help.
