How Does a Student Loan Affect My Credit Score?
A student loan can be a great way to help students start building their credit scores. When handled responsibly, college-bound students and their parents' can actually serve as a major asset in building a student’s credit history and credit score. This can help graduates in qualifying for their first apartment, car loan, or unsecured credit card. These payments are considered installment payments by the three major credit card bureaus and paying student loans back on time can help boost credit scores.
However, if a student loan is not handled responsibly, students and parents can feel overwhelmed with monthly payments that can compound interest as years go by. If any of these payments are missed, it can have a negative affect on your credit score and cause potential qualification problems for students down the road. All installment loans are treated the same way when calculating your FICO credit score. Student loans don’t have their own category or receive any special consideration. It also doesn’t matter if your student loans are federal or private. Both are treated the same.
How Can I Check My Credit Score?
You can request a free copy of your credit report from each of three major credit reporting agencies – Equifax®, Experian®, and TransUnion® – once each year at AnnualCreditReport.com or call toll-free 1-877-322-8228. You’re also entitled to see your credit report within 60 days of being denied credit, or if you are on welfare, unemployed, or your report is inaccurate.
Also check if the service is offered by your bank. Many banks in the U.S. are offering free credit check services via online banking.
How Can I Lower My Student Loan Payments?
Before you consider applying for these federal student forgiveness programs, look at your options towards lowering your student loan payments. Consider refinancing or consolidating your student loans in order to lower your interest rates. It’s usually easier to qualify for refinancing a year or two after graduation, so instead of placing your payments on auto-pay, consider checking in with your repayment strategy.
For more information on how to lower your student loan payments, contact us or fill out the form on this page.
Should I Stop Paying Back My Student Loans?
The short answer: No.
Anytime you are not making the minimum payment to cover at least the monthly interest charged, your balances will grow. If you become delinquent then interest can compile another 20 percent or so to the loan amount from added collection costs and penalties. Consider putting your loan in deferment if you are having trouble making your minimum monthly payment.
You may also qualify for the federal student loan forgiveness program.
How Can I Qualify For A Student Loan Forgiveness Program?
The easiest and fastest way to find out if you qualify for the federal student loan forgiveness program is to speak directly to one of our representatives. They can answer all of your student loan questions and even walk you through the application process. If you have taken out any of the following federal student loans you may qualify for the federal student loan forgiveness program.
- Federal Direct Subsidized Stafford/Direct Loans
- Federal Direct Unsubsidized Stafford/Direct Loans
- Federal Direct PLUS Loans
- Federal Direct Consolidations Loans
If you want to read more details about the work requirements to qualify for these programs, see this page: http://studentloansfaqs.net/student-loan-forgiveness/
Can I Talk to Someone About My Student Loans?
Sure! Fill out the form on this page to talk to one of our representatives about your student loans. We can let you know if you qualify within 24 hours.