Student Debt Impact on Credit Scores

Student loans have become a significant part of the American financial landscape. While they make college possible, they can also leave a lasting mark on your credit report. Here's what you need to know:

Payment History Matters Most

•   On-time payments boost your score
•   Late payments can cause significant damage

Credit Utilization Isn't Affected

•   Unlike credit cards, student loans don't factor into your credit utilization ratio

Length of Credit History

•   Student loans can help establish a long credit history, which is a positive

Credit Mix

•   Having different types of credit (including student loans) can positively impact your score

While student loans can help build credit when managed well, they can also become a burden if not handled properly. Missed payments, defaults, or excessive debt can severely impact your credit score and overall financial health.

Quick Tips for Managing Student Debt:

• Set up auto-pay to avoid missing due dates
• If you're struggling financially, explore income-driven repayment plans or deferment options
• If you are able to pay more than the minimum you will reduce the overall interest.

A good credit score opens doors to better financial opportunities. Don't let student debt hold you back from achieving your goals.

Call us at (800) 822-7120  you have any questions about student debt or concerns about your credit health.

Erik Kaplan | THD Credit Consulting | www.thdcreditconsulting.com