Bad Credit Student Loans
A lot of our visitors often ask how they can get a student loan with bad credit. The quick answer is you can’t get any loan with truly bad credit. The only notable exceptions are the Federal Stafford loan, Federal Perkins loan and Federal Consolidation Loan. Federal loans are backed by the government and are not granted based on credit.
For every other type of credit-based product, your credit will play a factor. If you are a student seeking financing above and beyond what you receive in federal financial aid and you have no credit or a poor credit score (generally a score less than 650), the only option you may have is to apply with a credit worthy co-signer. Applying with a co-signer means the lender will use your co-signer’s credit as the basis for lending you the money you need.
Unfortunately, your credit score is not all that may be required by the lender you choose. Factors such as your employment history, residency status, debt to income, income and other items are common criteria lenders use to determine whether they will approve a loan for you.
If you have poor credit (or your co-signer for that matter) do not set it aside as hopeless or as something you will get to later. Repairing poor credit can take years and you need to do whatever you can do now to climb back up the ladder. Investing time in improving your credit can save you thousands of dollars in interest on the loans you will likely need now and in the future. Bankruptcy is the death penalty of blemishes. Consider it only as an option of last resort and only after you have consulted a professional regarding your situation. Work at it and budget to improve your credit incrementally.
So, take it one step at a time. Review your credit report and score to see where things stand.
- Dispute inaccuracies with the credit reporting agencies
- Do not apply for new credit unless you absolutely have to
- Settle collection accounts
- Ask lenders to re-age accounts if you have late payments
- Consolidate if it lowers average APRs and total payments
- Do not close open accounts that are current
- In extreme cases, consider consumer credit counseling
Again, all of this takes time and is certainly a headache, but a little time, patience and dilligence will pay off in the long run. Continue to use the internet to research your options. Sites like myFICO.com have forums with other people just like you and plenty of good advice. Remember, there is no quick fix so don’t buy claims of instant credit repair you may see online. If you need help dispute truly inaccurate information, it’s okay to pay for a service to help you. One reputable firm is Lexington Law. However, be aware that they can’t make accurate information disappear from your credit report — no one can.