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5 Things to Know About Student Loans and Credit

Written by John Ulzheimer

College graduates are not strangers to student loan debt. Many people, in fact, are suggesting student loan debt is the next “bubble” set to burst.

It’s relatively easy to qualify for a student loan, but when the time comes to begin making the loan payments life can become considerably harder for recent graduates. If you are one of the more than 37 million consumers currently in student loan debt then it’s absolutely critical for you to understand how these loans impact your credit and how failing to pay these loans can haunt you longer than you may realize.

Here are five things to know about student loans and how they affect your credit:

1. Late payments on student loans

Late payments on student loan accounts are going to impact credit scores just like late payments on any other type of credit obligations.

Late payments are virtually guaranteed to cause a drop in credit scores. And while all late payments are bad, missing student loan payments can quickly snowball into a credit report nightmare.

Most consumers who use student loans to finance their education take out multiple loans during college, perhaps as many as one loan per semester. If a college student completes his undergraduate studies in four years he could easily have as many as eight student loans. These eight loans show up on his credit report as eight individual accounts, not one large loan.

About the author

John Ulzheimer


  • Students have been duped and conned into the dream of making money through further education. It’s unfortunate that our legislatures bailed out the banks, but have left the students in the dust. Thousands of well-meaning students will go to their graves in debt because of an unforgiving government.

  • I graduated with a MBA in 1997. I havent been able to get a good finance job since I graduated. I was informed that banks and other finance companies wont hire someone unless their student loans are not current.

  • I fell into default on my student loan because of two reasons. First, the amount they assigned me to pay was too great for my income, so naturally, I fell behind and second, I lost my job and was denied forbearance and fell into default. How do I get back on track? I’m still not working, but now for medical reasons, nor can I afford the amount they say I have to pay.

    • There are Student Loan Forgiveness Programs out there and while you have to join and pay a premium up front after a few months the payment drops to around $40.00 per month on a Pay as you earn program.

  • Real good. Bush and Obama bail out the automakers and insurance companies for billions, but the 37 million students who were duped into believing they would be able to repay their loans get it up the !@#$$%. The message to our great President is do the right thing and forgive these debts, then toughen up on who should get theses loans in the fierst place. Don’t make this younger generation turn into an older one that has to die in debt.

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