Student Loans and Credit: What You Need to Know
Published by Speed Credit
Table of Contents
- Do Student Loans Affect Your Credit Score?
- How Student Loans Help—or Hurt—Your Credit
- How Repayment Plans Impact Your Credit
- Late Payments, Forbearance & Default: What Happens?
- How to Manage Student Loans Without Killing Your Credit
- Next Up: Renting an Apartment with Bad Credit
Do Student Loans Affect Your Credit Score?
Yes—big time. Whether federal or private, student loans are **reported to all three credit bureaus**. They can either boost your score with on-time payments or tank it with just one missed bill. The balance, payment history, and age of your loans all factor in.
How Student Loans Help—or Hurt—Your Credit
Positives:
- Adds to your credit mix (installment loan = good)
- On-time payments build solid history
- Long loan age improves your average account age
Negatives:
- High balances may weigh down your debt-to-income ratio (especially for mortgage apps)
- One late payment can stick for 7 years
- Defaulting devastates your score and limits future credit
How Repayment Plans Impact Your Credit
Changing your repayment plan (standard, income-driven, etc.) does not hurt your score. But what does matter is:
- Staying enrolled and in good standing
- Consistently making at least the minimum payment
- Re-certifying income annually (if using income-based plans)
Pro Tip: If you can’t afford payments, request deferment or forbearance *before* you miss one. Late payments hurt more than pausing repayment.
Late Payments, Forbearance & Default: What Happens?
- 30 days late: Likely not reported yet—but interest and fees can rack up fast
- 90 days late: Officially reported to bureaus—expect a score drop
- 270 days late: Federal loans go into default and may be sent to collections
Private lenders may report faster and sue for repayment. Don’t wait—act early if you’re struggling.
How to Manage Student Loans Without Killing Your Credit
- Set auto-pay for every loan to avoid accidental misses
- Refinance only if you’re giving up federal protections with eyes wide open
- Track your loans using StudentAid.gov or Credible
- Use income-based repayment if your debt-to-income is high
- Don’t ignore them—ghosting student debt is a fast track to credit damage
Next Up: Renting an Apartment with Bad Credit
If student debt has hurt your credit, you’re not alone. In the next article, we’ll show you how to find a place to live—even with less-than-perfect credit—in Renting an Apartment with Bad Credit.
