Student Loans Impact on Your Credit
Student Loans- There are a lot of people out there who receive tremendous benefits from student loan assistance. This doesn’t include the 30% of people who obtain one only to drop out of school early, or for our 300,000 waiters and waitresses that have a Bachelor’s degree. It’s certainly a hit-or-miss scenario. However, what definitely shouldn’t be a hit or miss is how a student loan fairly impacts a credit profile.
Obviously, we can expect if we don’t pay our loan on time, or at all, that it will go late or into collection status. What really kicks us when we’re down though is that if you do go late on a student loan you don’t just get a single late. As student loans report per semester, and you received them for four years, then you will have eight lates from your eight different accounts causing eight times the damage and headache! Our experience shows an abundant amount of people will go late as soon as the deferment is over. This is generally because they aren’t aware or haven’t been appropriately notified when they have to pay. That then creates a seven-year penalty on your credit report, which seems harsh as criminals seem to serve less time for felonies.
The plot thickens as now we can see reports that the federal government along with an Attorney General is suing Navient (the largest student loan provider) for allegedly cheating borrowers out of their repayment rights. The allegations are that Navient directed struggling borrowers towards paying more than they had to, misallocated borrowers’ payments, and in some cases falsely reported borrowers had defaulted on their loans causing tremendous credit score damage. So apparently not all student loans provide as tremendous assistance as we hoped.
These kinds of cases seem like they will last forever, in the meantime, people will still be denied loans or will pay too much for the ones they can get. See if our friends at National Credit Care can help. They have helped many of our clients improve their credit so they are able rent better places, or participate in our rent to own program or go straight to buying a new place.
Check with National Credit Care here