The student debt situation in the US is worsening as we speak. In fact, it’s at its all-time worse! As a result, millennials and Gen Z are delaying (and in some cases, abandoning) their lifetime goals related to education, marriage, and starting a family.
Since the 1970s, the average American’s wage has increased by around 67%. At the same time, college tuition fees have risen by as much as 150%!
In the middle of this nationwide crisis, if there’s one thing that’s taken the biggest fall, it’s your credit score.
Yes, there is a link between the two. Read on as we unfold the situation and suggest plausible corrective strategies:
Does your credit score matter?
If the yearly cost of acquiring education at a decent college exceeds your savings, you need to turn to student loans. Unfortunately, most lending institutions/agencies will consider your credit score before declaring you eligible for one. If your credit score is not good enough to convince the lender, the request may be declined altogether—delaying your graduation.
The relationship goes both ways. While your credit score affects your ability to obtain a student loan, the opposite is also true. The student loan also affects the credit score. Let us explain.
The two-way relationship
By applying for and acquiring a student loan, you impact your credit score.
The good: You get to establish a credit score early on in life. If you repay the student loan on time, you enhance your creditworthiness. This will consequently lead to a successful post-grad life.
By the time you’re out in the market, you’ll be able to apply for loans to buy your first house! As per a report by the Huffington Post, student loans actually diversify your credit mix.
The bad: If you find yourself trapped in the student debt cycle and are unable to pay on time, you might hurt your score a ton. If you miss your payments or default on a student loan, you’ll wreck your credit score.
What can you do?
Whether your ability to acquire a student loan has suffered because of your credit score
Your credit score is suffering because you’re unable to pay back the student loan,
The solution is simple. Consult a credit repair agency. They’ll work with your credit bureaus and get any errors on your credit report corrected. They will also see if any misreported entries need to be removed for your credit score to improve.
The key to success is choosing a credit repair agency with a sound reputation. If you’re based in Greenville or Anderson, Masters Credit Consultants is your best bet! Get in touch to learn more about your services.