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The Impact of Student Loans on Your Credit Score

Having the right knowledge when it comes to student loans is very important to Americans these days due to the fact that 44.2 million of them have a student debt.

We will now discuss how a student loan will really affect your credit score.

Through this article, you will come to understand the contributions of student loans in your score, as well as the strategies that can help you maintain the best possible score.

Being Familiar with Credit Score

If you are curious on who calculates your credit scores and how it is calculated, just read this article further.

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:

Latest Credits

Credit History Length

What are Included in 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.

Mathematical computations are utilized in order to come up with a credit score. These specific calculations are not shown by FICO.
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.

To see how well you performed, you can request a summary of your credit report once a year from credit bureaus such as TransUnion, Equifax and Experian.

An Excellent Credit Score Should be Maintained

In order to maintain a great credit score, you have to find out what would make it good, very good and exceptional.

Within the standards of FICO, they are defined as follows:

A score is considered GOOD if it is between 670 and 739
A score is considered VERY GOOD if it is between 740 and 799
A score between 800 and 850 is an EXCEPTIONAL score

At this point, you already know where the favorable scores are classified, what you should know next is how it can be maintained. This can be done by simply paying your credits.

This would mean that you have to pay any type of credit that you have in full amount once they are due.

You can be easily helped in renting an apartment, obtaining a home loan, buying a car and even get more school loans if your credit score is favorable. In cases like this and many more, those people who have a stand between you and your goals will definitely check the credit score that you have.