Introduction
You might be wondering how your student loan affects your credit score. The long and short of it is that if you have any outstanding debt it is going to affect your credit history. Your credit history and credit rating is what is cumulatively referred to as your credit. This means that my loan for a college education or by using a credit card is going to build your credit in terms of credit history. However, the credit that my loan builds is ether going to be a positive or a negative one.
College Effect My Credit Score
The first thing that my loan can do to my credit is to build it in a positive manner. This can be done through several ways. For starters, you should always be prompt in making payments to your lender. You should also avoid defaulting on your student loans. If you are late in making payments or you default on your loan, you will end up harming your credit score. If I fail to pay my loan or I have a habit of making late payments, this will build a negative credit history.
The second thing that my loan can do to my credit rating is to affect my life once I leave college. This means that if a college student has poor credit, or fails to build credit while still in college, he or she will find it difficult to secure any type of loan after college. This means that you will find it hard to get an apartment, buy a home or to lease or buy a car.
The third thing that my loan can do to my credit rating is to affect my employment prospects after leaving college. This is because potential employers do a background check on people during the recruitment process. If you have poor credit you might be overlooked by the employer. This is because you have not demonstrated any skills in financial planning.
Fourth
The fourth thing that my loan can do is to affect my parent’s credit rating. This happens when one or both parents put their signature on a promissory note, and this is what is referred to as co-signing. Once your parent puts their signature on the loan agreement, the account history will appear on the credit report of anyone who has put their signature on the document. In most cases, private lenders make co-signing a requirement before the student loan can be approved.
Finally
The fifth thing that my loan does is that it can make my credit score to become better if I establish a good payment history. This means that over several months, I have to make regular and timely payments of my student loan. The process of regaining a good credit history takes about six months. What this means is that a student ahs to seek a student loan on their own without involving their parent. However, if the parent has co-signed my loan, it can be refinanced in future once the student is qualified to get a loan on their own.
