The Impact of Student Loans on Your Credit Score
Due to the fact that 44.2 million Americans have already taken a student debt, they are now making sure that they are properly educated when it comes to student loans.
We will now discuss how a student loan will really affect your credit score.
By reading this article, you will be educated on how a student loan can contribute on your score and what techniques you should follow in order to maintain the best possible score that you can have.
Understanding Credit Score
Who is responsible for calculating your credit score? How is it calculated?
FICO is the largest and the most popular company that issues credit scores; hence, most probably they are the ones that will issue your score too.
There are many factors that are taken into consideration with regard to how it is calculated such as:
How Long a Credit History Is
What are Included in Your Credits
The Total Amount that You have to Pay
These elements corresponds to 10%, 15%, 10%, 35% and 30% of your credit score.
Mathematical computations are utilized in order to come up with a credit score. These specific calculations are not shown by FICO.
If you want to know your credit status, you can several ways for it, in fact, there are some bureaus and companies that can provide you with the information that you need.
If you really want to check your credit score online, you can check a website called Credit Karma.
An annual credit report can be requested from various credit companies such as Experian, Equifax and TransUnion in order for you to know how well you performed that year.
An Excellent Credit Score Should be Maintained
Knowing what makes a good, very good, and exceptional credit score will help you maintain an exceptional score.
Based on FICO standards, they are classified as follows:
If a score is between 670 and 739, it is already considered a GOOD score
A score is considered VERY GOOD if it is between 740 and 799
If a score is between 800 and 850, it is already considered an EXCEPTIONAL score
Since we already have an idea on where the favorable scores are classified, the next thing that you should find out is how to maintain them. The truth is, you can easily do this by simply making your payments.
This would mean that you have to pay any type of credit that you have in full amount once they are due.
Once you have a favorable credit score, you can be assisted in having a home loan and rent an apartment, in fact, you can even buy a car and get more school loans. In cases like this and many more, those people who have a stand between you and your goals will definitely check the credit score that you have.