Do current student loans affect my credit score?
December 27th, 2009 | by admin |I recently applied for an American Express Blue Card because I heard it was the best card for college students, and I got declined for these reasons:
Proportion of revolving balances to revolving credit limits is too high. Length of time accounts have been established. Too many accounts with balances. Too many accounts recently opened.
My experian score is a 690, and the only accounts I have opened are multiple student loans totaling $25,000 that are deferred until I graduate (in 2 years) and a credit card that I am steadily paying off, I have never missed or had a late payment on it. Will I get declined for other credit cards simply because I have numerous loan accounts, they’ve all been started recently within the past two years, and I’ve only had credit for a few years?
4 Responses to “Do current student loans affect my credit score?”
By Dr. Robert C on Dec 30, 2009 | Reply
Credit Score Basics
Credit scores are designed to make it easy on lenders. They need to decide whether or not to approve your loan. Instead of manually reading through your credit reports, they can just look at a number: your credit score.
The number is generated by a computer program that reads through your credit reports. It slices and dices the data stored at the credit bureaus and spits out a number. Just like a human, the computer program is checking to see if you’ve borrowed in the past and if you generally pay as agreed.
So, yes, student loans affect your credit score…even if they are deferred.
However, your score is considered moderately high, so I believe you will not get declined for other credit cards.
Hope this helps!
By AnnaBanana on Dec 30, 2009 | Reply
I would cancel any cards you don’t use. Student loans shouldn’t count if you are still in deferment. I would say the main thing hurting you is the amount of credit you have available, even if you aren’t maxed out on cards. Like if you have a bunch of store cards with $1000 limits, even if you never get up to that limit it counts against you. Just cancel them and keep paying off what you owe on the wone card you do have. Also, you should know that American Express isn’t taken everywhere. If you just need a card in case of an emergency can you just use what you already have? Most people really only need one or two cards. If you have more than that you need to cancel some.
By debijs on Jan 3, 2010 | Reply
~~Yes having loans or credit cards with high balances or a potential of a high balance, compared to income will lower your score.
When you are denied you have the right (it’s on the letter of denial) to receive a free report from the credit reporting agency they used to check your report. Call the number provided. It’s a good idea to be sure all the info on your report is accurate.~~
By Basic on Jan 5, 2010 | Reply
From my understanding, no. I have student loans and it has not affected my credit score. I think it’s only when you start paying your loan that it begins to affect your score if you default or have late or missed payments. Hope this helps