After the heady thrill of graduation, you must step back and evaluate the sum total of your investment into your degree. Calculating your accumulated student loans can be daunting, but this debt isn’t entirely bad. Handled well, your student loans can actually benefit you long-term and help you build a solid credit report, which will improve your chances of getting future loans.
Get a Handle on Your Payments
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Managed properly, student loans can have a positive impact on your credit score. The most important thing to address is your monthly payments. If you keep up with your regular payments, you’ll gradually improve your credit score. If you miss payments, however, your score will go down. Those missed payments stay on your credit report for seven years, so think carefully before you allow this to happen. Avoid any accidental slip-ups by setting up automatic payments.
Seek Help When You Need It
If you can’t make a student loan payment, don’t stay quiet about it. Financial hardships can impact anyone, and student loan providers are typically very understanding. Reach out and explain your situation to your loan provider so you can discuss options before the payment is overdue.
If you just need a few more days, you can often adjust the due date. If you’re unemployed and need a few months to find a job and get your finances back on track, you can ask for a deferment or forbearance. This will delay your payments for a few months without the negative mark on your credit report.
Refinance When Necessary
If you’re paying off several student loans and struggling to keep up with the multitude, consider refinancing. Many students are forced to take out multiple loans for school. Carrying several loans can create a challenging situation when it’s time to pay them back. You can consolidate your loans and potentially lower your payments by refinancing. This will make it easier to stay on top of this financial obligation and ultimately raise your credit score.
Adjust Your Expenses
While a student loan can boost your credit score, it’s not something you want to hold on to long-term. Ultimately, lenders will still see this as an added financial obligation that might make it more difficult for you to handle a new loan. Demonstrate your financial responsibility and build strong money management habits for life by reorganizing your personal finances and paying down debt aggressively.
Evaluate your monthly expenses and look for ways to cut back. Avoid the temptation to eat out every day at your new job. Consider public transportation for your daily commute. Re-evaluate monthly expenses like club memberships, cable television, or streaming services. Channel your savings toward your student loans for faster freedom from this debt.
Treat your student loans as a valuable opportunity to build a solid credit report. If you never miss a payment, organize your financial obligations well, and pay your loans off in a timely manner, this will help rather than hurt your credit score, giving you the foundation you need for a strong financial future.