Understanding Services

How Does a Student Loan Affect 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

Let us find out on who really calculates a credit and how it is calculated.

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:

Credits that are New

Duration of Credit History

What Composes Your Credits

Payment Transactions

The Total Amount that You have to Pay

These elements corresponds to 10%, 15%, 10%, 35% and 30% of your credit score.

A credit score is made by using mathematical calculations. The exact calculations that FICO has come up with will not actually be transmitted.
Since there are several bureaus and companies that can provide you an information on how your credit is doing, you do not have to worry much about it.

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.

A Credit Score Must be Maintained from Good to Exceptional

Knowing what makes a good, very good, and exceptional credit score will help you maintain an exceptional score.

Through the standards provided by FICO, they are defined as the following:

A score between 670 and 739 is a GOOD score
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

Now that you already know where the great scores are, you should start finding out how it can be maintained. The truth is, you can easily do this by simply making your payments.

This implies that all the credits that have, including your student loan, should be payed as soon as they are due and it should be payed in full.

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. People who stand between you and your goals will certainly examine your credit score closely, just like the other cases.