Credit Repair

Improve Your Credit Score Using Student Loans

There are several ways to. But, very few people know that student loans can also play a crucial role in this regard. If you follow certain strategies, it can help you achieve a better FICO score. It is very important for you to keep in mind that any outstanding debt that you to a creditor contributes in creating your credit history. This outstanding debt can be a student loan. The basic thing is that when you are regular in making the monthly payments toward this loan, it will result in a better monthly payment history, which will eventually lead to improved credit. On the other hand, when you start making defaults, it will actually damage the health of your credit report.

Using Student Loans to Build Positive Credit

If you are using student loans to improve your credit score, there are certain do’s and don’ts that you must follow strictly. For example, you should take as much loan as you can easily afford to repay. You must make the repayment in a timely manner. Avoid late payments. Late payment does not only attract penalty charges, but it also affects your credit report adversely. Needless to say that defaulting on these loans will seriously hurt your credit. It is very important for you to keep in mind that your monthly payment history makes up to 35% of your FICO score. If you build a good payment history, you will end up building a good credit score. Likewise, if you build a bad payment history, your score will go down and down.

FICO Score and Life after College

College students often do not realize how crucial a role credit score plays in a person’s financial and professional life. Your is going to influence your life immensely after college. That is the reason students are recommended to take care of their financial life right since they join college. Even if you are studying in a college, you can do several things to improve your credit score. Student loan can be a great tool in this regard. Better credit history will make it very easy for you to buy homes and cars on low rate loans. In fact, a majority of employers these days first check the credit report of the job applicants before appointing them. So, if you have a good FICO report, your chances of getting a better job is also very bright.

Overall, a student loan has an array of advantages. It finances your education. And, at the same time, it also provides you a great opportunity to improve your credit score significantly.


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Posted in Build Your Credit, Credit Repair | 2 Comments »

2 Responses to “Improve Your Credit Score Using Student Loans”

  1. alphonsa says:

    Student loan is a loan which is taken by the student to pursue his professional degree so that he can earn his livings and repay the loans. This is the best alternative for students who are self dependent. With this article it gives a deep thought how this type of loan can can improve the credit score of an individual. Because the student loan is an outstanding debt unless and until the students repays the complete amount. So it’s a starting phase of the individual to increase the credit score by paying the monthly installments on time. We should avoid late payment as they can affect the FICO score and also avail only that much loan which is acceptable to my pocket. Because this loan is taken for continuing my education and not for enjoyment sake. And once I am through with this process my credit score is increased which leads to lower home loan rates and auto loan.

    So student loan is a blessing in disguise as it suffices the student with completing his professional education so that he is employable and also it enhances the credit score which is very important for any individual to sustain in the society. So be alert with the situation and remind yourself on a fortnight basis when and how much amount has to be payed to the lending institution. Budget yourself so that u do not fall prey to the adverse situation of running short of money . Because planning plays an important role and we should keep aside the money that we have to repay .And has to set some limits for a good and sustainable future.

    This is the trick of the trade for saving yourself from bad credit repair. This method I haven’t thought of improving credit rating of an individual

  2. abel says:

    Life is not smooth as we think about it. There are lots of ups and downs in life .The same is the case credit too. When the people apply for loan his past history must be considered. If there will be any problem regarding for credit then the application will not be improved .If there will be any problem of getting approval for student loan then it is necessary to speak with loan officer. you have to explain the reason of having the bad credit .some time there may be miss happening in the family or some close one were hospitalized due to which you were not able to pay the amount on time. If the loan officer realized your situation then perhaps they pass your loan. It is not always that you can change their mind, but you can at least try for it.

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