Do student loans affect my credit rating?


Student loans are installment loans. Because you borrow all the money at once and then pay it back in installments. And, like other installment loans (think: your car loan and mortgage), they appear on your credit report. And, yes, they have an impact on your credit score.

Tell me more. How do student loans affect my credit rating?

Although they are considered good debt, student loans can lower your credit score if not handled responsibly (read: paid on time, every time). Because payment history is quite an important part of your credit score. If you pay late, your score can drop by 50 to 100 points.

Yeah. Even if I miss a student loan payment?

Federal loan officers generally do not flag you as overdue until you are 90 days past the due date. But private loan servicers often report late payments once they’re 30 days overdue. Psst… late student loan payments can stay on your credit report for up to seven years.

But my student loans will be forgiven, right?

Not sure. The Biden administration has already canceled $6 billion in student loans for borrowers who allege they were defrauded by their colleges. And President Joe Biden has hinted that more widespread forgiveness is still on the table. But no official decision has yet been made.

Can I do anything while waiting?

You don’t have to worry about federal student loan repayments right now (thanks to a pause which is due to end on August 31), but it helps to have a plan for reduce your debt.Just in case forgiveness is forbidden. States will help if you move there. And depending on your career, you can also try Cancellation of civil service loans.


Student loans can have the same impact on your credit score as any other major loan. It is therefore important to make payments on time. Unless they are forgiven before the end of the break.


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