If you find yourself wondering what credit score is needed for a student loan, you should first know that there are two main types of loans with different requirements. Whether or not you need a credit score and established credit history depends on what type of loan you’d like to apply for. There are two types of student loans you can apply for: private and federal.
You don’t need a credit score for a federal loan, but you will need a good credit score in order to get a private loan. However, even if you don’t have much credit history or your credit score isn’t the greatest, there are still ways you can apply for a private student loan.
Here we’ll explore the credit scores you’ll need to apply, eligibility requirements for both types of loans, and how to apply for a loan with bad credit.
What Is A Credit Score?
A credit score is a number typically between 300-850 assigned to each individual that is based on their credit portfolio over time. It’s meant to show the creditworthiness of an individual, or in other words, if you pay your bills on time.
A credit score is often asked for when applying for major loans, such as student loans, car loans, or a mortgage.
There are a few ways to build your credit, such as paying all your bills on time, paying off debt, and asking for credit limit increases on your credit cards.
How To Check Your Credit Score
It’s a good idea to check your credit score before applying for student loans, just to get a better idea of where you stand. Checking your credit score is a simple process and there are a few reputable companies that will help you do it.
Websites such as Equifax, Experian, and TransUnion will allow you to request a credit report for a fee. You can also check with your bank first as payday loans OH some of them will be able to provide you with your current credit score. You can also request your score for free using LendingTree’s free credit score tool.
What Credit Score Do You Need For A Federal Student Loan?
You don’t need to have an existing credit score to get a student loan. This type of loan is provided by the government with the understanding that many college-age students don’t have enough established credit history to apply for private loans.
Unlike private loans, federal loans give you a lower interest rate, so many students prefer them over the alternative. Another advantage is that making regular payments on a federal student loan can actually help you build your credit score.
Federal Student Loan Eligibility Requirements
In order to qualify for a federal student loan in the US, you’ll need to be a citizen enrolled in an eligible college program.
To apply for a federal student loan, you’ll need to submit a FAFSA (Free Application for Federal Student Aid) application. Here, you can apply for both student loans as well as grants and scholarships that don’t need to be paid back.
What Credit Score Do You Need For A Private Loan?
Unlike a federal loan, you will need some sort of credit history to apply for a private loan since these come from non-government lenders or banks. In general, lenders are looking for a score of around 670 or higher, so be sure to check your credit score before going to apply.
If you don’t have any credit history but you still require financial aid above and beyond a federal loan, then you may still be able to apply for a private loan using a co-signer.
