Do Student Loans Affect My Credit Score?

A group of happy smiling college students in caps and gowns celebrating their graduation.
Dear Experian,

Do student loans affect your credit scores? If so how are they used in the calculation?


Dear LBC,

Student loans affect your credit report and credit scores, including FICO scores, the same way as any other debt on your credit report. Account information, such as the amount of the loan, your monthly payment amount, and your payment history are all factored in when a credit score is calculated.

Even if your loans are still in deferment and you have not yet begun making payments, your lenders will still consider the total amount you owe, and will eventually have to repay, when determining whether they feel you are in a good position to take on new debt.

Missing a Student Loan Payment Will Negatively Impact Your Credit

The most important factor in credit scoring is your payment history. When you miss a payment, the delinquency remains on your credit report for seven years.

Student loan companies typically report a separate account for each enrollment period that you attended school, usually each semester. Even though you may only make one payment each month for the total loan amount, you still would see each individual loan in your credit report.

For example, if you attend school four years, and each semester you get a new loan, you could see eight small loans on your credit report — one for each semester. As a result, missing just one student loan payment can result in multiple delinquencies appearing on your credit report. So, it is very important to make every payment on time.

Often, student loans will be transferred from one lender to another. If your loans are sold or transferred to another creditor, and the new lender also reports to Experian, you will see both the original loans and the new loans on your credit report. The original loans will be updated to show that they are paid or transferred, but the payment history will remain on the report.

What Happens If I Default on a Student Loan?

Federal student loans are guaranteed, or insured, by the government. If you default on a federal loan, the lender can file a claim with the government to recover the amount due. The status of the loan will then show as a Government Claim, which is considered derogatory. Keep in mind that you still owe the debt, and the government will typically open a new account in order to collect the balance on the account.

Private student loans are not backed by the government. If you default, the account may be written off and sold to a collection company. Both the original loan and the collection account will appear on the credit report. A collection account is also considered derogatory.

Contact Your Lender If You Think You May Miss a Payment

If you think you may not be able to make your student loan payment, contact your lender to discuss your options. It's best to do so before your payment becomes past due. Many student loan companies offer payment options to help you get back on track and avoid defaulting on your loans.

Thanks for asking,
Jennifer White, Consumer Education Specialist