How Student Loans Affect Credit Score

Student Loans Affect Credit Score. When you left school, you enjoyed a grace period of six to nine months before you had to begin repaying your student loans. But the debt was there all along--sleeping like an 800-pound gorilla in the corner of the dorm room. Once the grace period was over, the gorilla woke up and is now impacting your credit--but is it positively or negatively?

One way to find out is to pull a copy of your credit report. There are three major credit reporting agencies, or credit bureaus--Experian, Equifax, and Trans Union--and you should get a copy of your credit report from each one. Keep in mind, though, that while institutions making student loans are required to report the date of disbursement, balance due, and current status of your loans to a credit bureau, they're not currently required to report the information to all three, although many do.

If you're repaying your student loans on time, then the gorilla is behaving nicely, and is actually helping you establish a good credit history. But if you're seriously delinquent or in default on your loans, the gorilla will turn into a monster and wreak havoc on your credit history.