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The Impact of Student Loans on Your Credit Score

Americans are very much concern on having a proper education when it comes to student loans since 44.2 million of them already have a student debt.

We will now discuss how a student loan will really affect your credit score.

This article will teach you on how much student loans make a difference in your score and the strategies that you should do to maintain that score as much as possible.

What a Credit Score Means

If you are curious on who calculates your credit scores and how it is calculated, just read this article further.

Your credit score is probably calculated by FICO since they are the most popular software company within their sector.

There are many factors that are taken into consideration with regard to how it is calculated such as:

Latest Credits

Duration of Credit History

Your Credit Mix

Payment Records

Due Amounts

Your credit score is made up of 10%, 15, 10%, 35% and 30% of these components, respectively.

A credit score is made by using mathematical calculations. FICO will not actually show the exact calculations that they have computed.
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.

Websites like Credit Karma can provide you an information regarding your credit score.

We highly recommend that you obtain a summary showing how you performed, this can be done by requesting a credit report once a year from a couple of credit companies such as Experian, TransUnion, and Equifax.

Make Sure that a Good to Exceptional Credit Score is 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:

A score is considered GOOD if it is between 670 and 739
A score is considered VERY GOOD if it is between 740 and 799
A score is considered EXCEPTIONAL if it is between 800 and 850

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. Believe or not, it is quite easy to do this, you just have to simply pay your credits.

This would mean that you have to pay any type of credit that you have in full amount once they are due.

You can be easily helped in renting an apartment, obtaining a home loan, buying a car and even get more school loans if your credit score is favorable. People who stand between you and your goals will certainly examine your credit score closely, just like the other cases.