Your credit rating can affect many different areas of your life, including your ability to mortgage a home, take out a loan, and may even impact your employment prospects. Because so many Americans have massive student loan debt, many are concerned about the role this debt plays in their credit rating. Spirit of America Federal Credit Union of Lincoln, NE, knows that getting accurate answers to pressing financial questions is crucial. That’s why this trusted credit union provides the following information to people with questions about their credit scores.

Student Loans & Your Credit Rating: A Credit Union’s Insight

Late Payments Will Have an Effect

If you live on a fixed income, you may have issues staying current on your student loans. The good news is that one or two instances of late payments won’t necessarily have an impact. However, if you are chronically late or fail to pay for an extended period, your credit score will suffer. When it comes to federal student loans, lenders must wait up to 90 days before reporting you to a credit bureau; with private student loans, lenders can report you after a single missed payment.

Once this occurs, your payment is considered delinquent. After 270 days, your loan will be considered in default. A delinquent defaulted student loan will be present on your credit report for a period of seven years, and your credit rating will reflect these occurrences. 

How Student Loan Debt Can Benefit You

In some cases, student loan debt can actually boost your credit rating, as long as you make payments as mandated. Having a good credit score entails having a variety of loans and credit types, as this illustrates healthy financial behavior. A student loan is considered an installment loan, while credit cards are considered revolving loans. As a result, as long as you’re fiscally responsible with your debt, student loans can actually boost your rating a bit.

More than just a bank, Spirit of America Federal Credit Union believes in forging solid relationships with residents of Lincoln by providing clear advice on financial issues. Contact this credit union today by calling (402) 467-1102. You can also learn more about their complete listing of services by visiting their website.