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Here’s How Student Loans Affect Your Credit Score

Here’s How Student Loans Affect Your Credit Score

Education on student loans is something many Americans concern themselves with as 44.2 million have taken on student debt.

Today we’re covering how student loans affect your credit score.

Learn how much student loans contribute to your score and what your strategy should be to keep the best score possible. Let’s get started!

Credit Score in Context

Who calculates your credit score? How is a credit score calculated?

The “who” is most likely FICO as they are the most popular credit score issuers.

The “how” well, your resulting credit score takes into account many factors:

  • New Credit
  • Length of Credit History
  • Credit Mix
  • Payment History
  • Amounts Owed

These elements make up 10%, 15%, 10%, 35%, and 30% respectively.

Mathematical calculations are used to arrive at your credit score. These exact calculations are not broadcast by FICO.

There are a couple ways to see how your credit is fairing and there are many companies and bureaus who can provide you with that information.

You can find your credit score through sites like

If you want a breakdown of how you performed (which we recommend), you can request a credit report once a year from credit bureaus Equifax, Experian, and TransUnion.

Maintain a Good to Exceptional Credit Score

To maintain a favorable score, you need to know what makes a “good,” “very good,” and “exceptional” credit score.

By FICO standards, these are defined as follows:

  • a Good score is between 670 and 739;
  • a Very Good score is between 740 and 799;
  • an Exceptional score is between 800 and 850.

Great, we now know where favorable scores lay. So how do you maintain them?

Simply put, you can maintain a favorable credit score by making your payments.

This means any credit you have, including your student loans. Pay them when they are due and pay the full amount.

A favorable credit score will help you rent an apartment, get more school loans, obtain a home loan, and buy a car. In these instances and many others, the people who stand between you and your goals look at your credit score.

When You Cannot Maintain a Favorable Score

If you are having trouble making payments on your student loans there are options for you which can bring your credit score back up!

If you forget to make payments, every lender offers automatic payment. Never miss a payment again.

If you can’t afford to make the payment, check into these payment options:

  • Standard Repayment
  • Graduated Repayment
  • Pay As You Earn Repayment Plan (PAYE)
  • Income-Based Repayment Plan (IBR)
  • Income-Contingent Repayment Plan (ICR)

You could also look into the Obama student loan forgiveness initiative.

When it’s difficult or impossible to make your student loan payment, contacting your lender about options can be confusing or anxiety-inducing.

This causes some people to avoid contacting their lender. Ignoring the situation won’t make it go away.

It’s essential to your relationship with your lender and for your credit score, to get beyond confusion and anxiety and take advantage of a repayment option.


About Emma Gilbert

Working in the marketing industry since 2002. This blog is one of my hobbies.

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