Do Student Loans Affect Credit Score – THE TRUTH!!

Education is essential in personal and career advancement, but financing higher education can sometimes be a big challenge. Many take up student loans to enroll in school to cope with the fees. In many cases, obtaining government student loans is not within reach, so many students can only take private loans. Private student loans have become a popular solution to this financial challenge.

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Do Student Loans Affect Credit Scores?

Student loans can affect or help your credit score. If you make your payments on time, it can boost your credit score with time. But if you miss a payment, it can bring about a serious drop in your score. It is a two-way thing.

Depending on your student loan type, you can be given additional time to make a payment before your late payment is reported to the bureau.

You should understand the steps you can take if you can’t afford to pay to avoid a big blow to your credit.

How Student Loans Can Affect Your Credit Score

Student loans will affect your credit score if:

  1. You take a new loan: new loans can decrease the average age of your credit accounts.
  2. Miss a payment: missing a payment can make you fall behind on several student loans. Even one late or missed payment can affect your credit score.

Do Student Loans Affect Credit Score

How Student Loans Can Help Your Credit Score

Student loans can affect your credit score if:

  • You make payments on time: Making payments on time can help build a positive payment history, which is the most significant scoring factor.
  • You add to your credit mix: possessing open and revolving credit accounts can help your credit score because they show that you can manage different types of credit. Your student loans will add to your credit mix if you don’t have any installment loans.
  • Pay the balance down: credit scores review the portion of your loan balance that is still due. Paying down installment loans can help your credit scores.
  • Thicken your credit file: a thin credit file is generally a credit report with fewer than five credit accounts. Lenders often give out student loans concurrently with starting a new quarter. Each of these disbursements could be reported to the credit bureaus as a separate credit account, which can help thicken your credit file and help your creditworthiness.
  • Increase the age of your accounts: the age of your newest and oldest credit accounts can affect your scores, even the average age of all the accounts.

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Frequently Asked Questions

Below are frequently asked questions.

How Long Do Student Loans Stay on Credit Reports?

Student loan defaults can stay on your credit card reports for about seven years, and lenders may be reluctant to offer additional credit.

How Does a Missed Payment Affect Your Credit Score?

You have 90 days before your loan is deemed delinquent if you miss a payment. Missed payments appear in your credit reports after that time, and your credit score may drop.

How Do Student Loans Affect Your Credit Score?

Student loans can significantly affect credit scores depending on how reliably you repay what you borrowed. If you miss a payment, it can bring about a serious drop in your credit score.

What are the Best Strategies to Pay off Student Loans to Avoid Hurting Your Credit Score?

To avoid hurting your credit score when paying off your student loans, follow these strategies:

  • Pay more than the least monthly payment: this will reduce your interest cost with time.
  • Paying during your grace period will help reduce the total amount to pay for interest.
  • Consider the option of making monthly automatic payments: this helps ensure that you are paying on time. In some cases, it can also reduce your interest rate.
  • Be aware of your options for repayment: contact your lender instantly if you can’t make a payment. You should know the debt relief programs that are available to you.


With time, your credit score will be positively impacted if you stick to your promise and repay your student loan. However, failing to do so might cause serious harm to your credit score.