How do student loans affect credit ratings?
You have now finished school and are looking toward building a credit score. How does your student loan affect your credit?
One of the first things to know is that the credit score used by most lenders divides loans into two categories. They are installment loans and revolving loans. Examples of an installment loan would be a car or home loan and yes, the student loan. This is because you pay a fixed amount every month. Credit card make up the majority of revolving loans where you control your monthly payment.
With that known you can see that owing a lot of money with installment loans will not hurt your credit rating as much as maxing out your credit cards. Not making payments on time or missing payments will hurt your credit score no matter what type of loan you have. Making payments on time helps increase your credit score.
Lenders when offering credit will also look at your ability to repay a loan. At this point a student loan is equal in terms of debt-to-income ratios.
You are entitled to a free credit report from each of the three major credit companies each year. Take advantage of this and get one every 4 months so you know your credit score.
While you are becoming aware of your financial scene why not do a search for unclaimed property. With CashUnclaimed.com a comprehensive search of all state and federal databases is done. Within moments you will know if you have unclaimed money.
