If you’re concerned about the impact student loans will have on your financial future, you’re far from alone. And while your primary focus may be on creating a plan to pay off those loans efficiently, it’s important to know that your student loans can influence other areas of your financial life as well, like your credit health.
Student loans are a type of installment loan. Like other loans, student loans appear on your credit report. As a result, they can play an important role in helping you build credit history and will impact your credit score in various ways.
Recently, there have been changes to federal student loan programs that could have an impact on your credit report and score if you have eligible loans. First, we’ll talk about how student loans can affect your credit score. We’ll then discuss these student loan announcements and the implications they can have for your credit health.
Student loans and your credit score
The most important thing you can do to maintain healthy credit is make sure you’re paying your bills on time — student loans are no exception. Even one missed payment can lower your credit score, and late payments can stay on your credit report for up to seven years. Staying on top of your student loan payback schedules is essential, especially since you may need to pay your loans to different servicers. You can use studentaid.gov to help keep track of your federal student loans’ statuses and servicer information. Payment history may be the most important factor, but there are other ways your student loans can affect your credit score.
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