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How can student loans affect your credit?

Student loans help pay for books, living expenses, and college tuition.

You do not need good credit to take one out, but if you fail to pay, they will hurt your credit. Usually if you’re having trouble paying back your student loan, the lender  may give you extra time to pay before they report you to the credit bureaus.

Once your student loan is late, the lender reports you to the credit bureaus, and you begin to establish a track record.
How long does it take before your student loan lender reports you to the credit bureau?    It depends on the type of loan you have.

Federal student loans: Servicers wait at least 90 days to report late payments. Federal direct PLUS loans, available to parents and graduate students, require a credit check. However, your credit score will not affect your rate; all PLUS loans disbursed in the same year have the same rate.

Private student loans: Private loans require that at least one borrower have good credit. The lender will perform a credit check to determine whether you qualify for the loan. The higher your credit score, the lower the interest rate you will likely receive. Lenders can report them after 30 days. However, lenders can charge late fees as soon as you miss a payment. If your lender does report your late payment, also known as a delinquency, it will stay on your credit report for seven years. If your budget tightens, ask your lender about lowering or pausing your monthly student loan payments. You might be able to:

  1. Sign up for an income-driven repayment plan if you have federal loans.
    2. Apply for a modified payment plan if you have private loans and your lender offers this option.
    3. Enroll in deferment or forbearance to temporarily pause your monthly payments

 If your student loan payments are reported late, it will stay on your report for seven years. Credit repair agencies like TCC can advocate on your behalf to ask the lender to remove the negative late payment from your credit file. This is called a letter of goodwill. Letters of goodwill should be carefully written as you often get only one chance to explain why the late payments should be removed.
If your student loans were reported late to the credit bureaus don’t wait. Act now so that TCC can help you remove them from your credit.


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