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How Does Student Loan Debt Affect Your Credit Score?

How does student loan affect credit score? Missed and late payments may not negatively impact your credit score, but missed payments can. Here’s how to repair your credit after missing a few payments. In a short time, you’ll better understand your credit score. Here are some common ways to repair your credit after a student loan.

Debt-to-income ratio

Your debt-to-income ratio is the percentage of your total debts of more than 36% of your monthly income. It’s also known as your debt-to-credit utilization ratio. A low debt-to-income ratio shows that you can afford more debt. In general, lenders prefer lower ratios.

Late payments

Missing student loan payments can negatively impact your credit. A delinquent federal student loan will not be reported to credit bureaus for ninety days. On the other hand, private lenders will report any loan more than 30 days past due. Even if you don’t default, late payments on student loans will affect your credit for seven years.

How Does Student Debt Affect Your Credit Score


Do forbearances on student loans affect your credit score? This is the question on most people’s minds. The federal government has recently introduced new loan policies, including the requirement for students to request a forbearance. The paused student loan should appear as current on your credit report. This type of forbearance is similar to a deferral, which has the same impact on your credit. While both will show up as “current” on your report, your debt will be a lower percentage.


Generally, borrowers with good credit get a better interest rate, which is beneficial because it means lower monthly payments. Having a lower interest rate also means paying off the loans faster. It may make sense to wait until you have a good credit score before refinancing. Furthermore, some lenders offer special incentives to their customers.


Students who have fallen behind on their student loan payments may be wondering how they can prevent the negative impact on their credit score. At the same time, loan defaults will indeed stay on your credit report for seven years. You can restore your credit score and avoid defaults.



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