Learn more about private student loans
The credit score needed for a student loan will depend on the type of loan you want to take out – federal or private. So if you don’t have a credit score, or if your score is bad – a FICO score of 629 or less – you have options.
Here’s how your credit affects how you borrow money for a student loan or refinance a student loan.
Do I Need A Credit Score For A Federal Student Loan?
You don’t need to have a credit history or a co-signer to get a direct federal undergraduate loan. This type of loan is preferred over private student loans because it carries a lower interest rate and offers income-based loan repayment cancellation options.
To get a federal student loan, you will need to meet the basic conditions eligibility criteria, such as citizenship requirements and enrollment in a qualifying program.
Submit the Free Federal Student Aid Application, or FAFSA, to initiate the process of a federal student loan. This is the key to unlocking all types of aid, including scholarships, scholarships and work-study programs.
Making payments on a federal student loan can help you build your credit, but a score won’t show up with any of the three credit bureaus until about six months after you start paying.
What credit score is required for a private student loan?
If you’ve reached the federal student loan limit and need a private student loan, you’ll need a credit history to qualify.
Most private lenders require you to have a credit score of at least 670 or higher on a scale of 300 to 850 used by FICO, the most well-known credit score.
If you don’t have a credit history, you’ll need a co-signer with a good credit rating and a stable income to qualify for the loan. A co-signer takes responsibility for paying off the loan if you cannot.
There is a little lenders who do not require credit or a co-signer. In general, they will consider earning potential rather than credit history. But the interest rates on these loans are higher than federal student loans and credit-based private student loans.
Compare offers from multiple lenders to get the best rates.
What Credit Score Is Needed To Refinance Student Loans?
If you already have college debt, refinancing can save you money by lowering your rate. You need good or excellent credit to qualify for student loan refinancing. The minimum credit score requirements for lenders range from 650 to 680.
The better your credit, the lower the rate you are likely to get. The credit scores of borrowers approved for student loan refinancing are often in the 700s. You may be able to refinance student loans with bad credit if you are applying with a co-signer.