Q. Does a student loan hurt credit score?
A. Yes, but the negative impact is small and there is a silver lining to it.
The Negative Impacts
Applying for a new private student loan account (and some federal student loan programs) will result in a hard pull of your credit report, which can reduce your credit score by a few points.
But like mortgages and auto loans, you can shop around the best student loan deals within 14-45 day period without repeating negative impact on your credit report.
When a new account is created, it will appear separately from the inquiry on a credit report, which will cost another few points. But that will be all the damage it could cause.
The Positive Impact
First, the good news, the amount owed in student loans has little impact on credit score.
Paying back student loans creates a great opportunity for someone with very little credit history to establish an excellent payment history, which will be a huge help for someone who just starts out to establish good credit score.
A. Yes, but the negative impact is small and there is a silver lining to it.
The Negative Impacts
Applying for a new private student loan account (and some federal student loan programs) will result in a hard pull of your credit report, which can reduce your credit score by a few points.
But like mortgages and auto loans, you can shop around the best student loan deals within 14-45 day period without repeating negative impact on your credit report.
When a new account is created, it will appear separately from the inquiry on a credit report, which will cost another few points. But that will be all the damage it could cause.
The Positive Impact
First, the good news, the amount owed in student loans has little impact on credit score.
Paying back student loans creates a great opportunity for someone with very little credit history to establish an excellent payment history, which will be a huge help for someone who just starts out to establish good credit score.
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