The importance of good credit
Building and maintaining good credit is a lifelong financial skill. It can make a big difference when you apply for a car loan, credit card, lease, mortgage, or even when you apply for a job.
Undergraduate student loans and credit
If you didn’t have a strong or established credit history when you applied for your private student loan, you probably added a cosigner. Their credit history was evaluated along with yours, and if you were approved, they share the legal responsibility for repaying the loan.
Undergraduate student loans are one way you can build your credit history. If you consistently make on-time payments, student loans can have a positive impact on your credit score. On the other hand, if you miss payments and fall behind, your actions can indicate that you’re a higher risk to a company considering giving you a loan or credit card. It can also lead to you getting a higher interest rate than someone with better credit.
Graduate student loans and credit
As a graduate student, you may have federal and private undergraduate loans in repayment. It’s just as important that you keep your payments current when you’re a graduate student as when you were an undergraduate. Private graduate student loans are credit-based, so your credit history plays an important role in whether you can qualify for a loan. When you apply for a Direct Grad PLUS Loan, the government will perform a credit check to make sure you don’t have an adverse credit history, such as bankruptcy, tax liens, or foreclosures. Learn what’s considered adverse credit