Do Student Loans Affect Credit Score?
5 Min Read | Last updated: July 23, 2026
Learn how student loans affect your credit scores, get tips for making loan payments, and explore different options for when money is tight.
At-A-Glance
- How you manage your federal student loans—whether you pay on time, late, or never—directly affects your credit.
- Making steady on-time student loan payments can help boost scores, while late or missed payments can lower them.
- Paying off, refinancing, or getting loans forgiven can impact your credit in positive and negative ways, so it’s helpful to learn how these strategies influence your score.
How you manage your federal student loans can play a major role in your credit score. When the government paused federal student loan payments in 2020, many borrowers who had fallen 90 or more days behind on payments saw an average 74-point increase in their credit scores.1 Once payments and then reporting to credit agencies restarted, delinquent borrowers saw steep drops in their scores.2 Student loans obviously affect credit, but understanding why—along with strategies for paying loans down—can help you protect yours.
Do Student Loans Affect Your Credit Score?
Yes, student loans definitely affect your credit by adding more credit accounts to your name and increasing your overall debt. What sank credit scores for millions of borrowers was that credit reporting resumed for loans that were 90 days or more past due—and since payment history is the largest credit-scoring factor, millions saw their credit take a hit.3
How Do Student Loans Impact Your Credit History?
Like all forms of credit, how you manage your student loans affects your credit history, and a quick refresher on the five general credit scoring factors may help you learn how to strengthen your credit across all your accounts.2
- Payment History
This is the most critical factor: whether you pay your student loans and other credit accounts on time.
- Amounts Owed
This measures your total student loan debt and the amount you owe on other accounts, such as credit cards or car loans.
- Length of Credit History
Lenders look at the age of your student loans and other accounts to gauge your experience managing multiple forms of credit. - Credit Mix
Having a healthy variety of credit types, like installment loans (student loans) and revolving credit (credit cards), can positively impact your score.
- New Credit
Each time you apply for a new private loan, a federal Direct Plus Loan, or a credit card, it can trigger a hard inquiry on your credit report, which may temporarily lower your score.
How Student Loans Make Positive Impacts on Credit Scores
When there’s room in your budget to make regular minimum payments (although more than the minimum is ideal for saving on interest), your student loans can become an excellent tool for building credit scores.
Here’s how:
- Building an On-Time Payment History
Making consistent monthly payments gives lenders the proof of reliability they want to see.
- Diversifying Your Credit Mix
The presence of an installment loan on your credit profile suggests you can handle multiple types of debt at once.
- Increasing Your Credit History Length
Because student loans take years to pay off, they help establish a long, stable average account age.
How Student Loans Make Negative Impacts on Credit Scores
Student loans can quickly transform from a credit-building tool into a quagmire if you’re dealing with the following:
- Chronically Late Payments
It's been said time and time again, but late payments, especially those that are 90+ days late, severely impact scores, sometimes for up to seven years.4 Continuing to miss payments can push your loan into default, leading to even longer-lasting credit damage.
- Higher Credit Utilization
As your debt balances, or amounts owed, grow larger or incur more interest, you’ll appear more and more overextended to lenders, placing affordable borrowing options further out of reach.
Can Student Loan Refinancing Improve Your Credit Score?
Refinancing your student loans involves consolidating several loans into a single new private loan, ideally with a lower interest rate and a single monthly payment. However, refinancing comes with risks that can negatively impact your credit.
Here are the potential pitfalls you need to keep in mind:
- Hard Credit Checks
Refinancing can involve a hard inquiry when you apply, which can cause a small, short-term dip in your credit score.
- Closed Accounts
When you pay off and close older loans, it may lower your average account age, which could lower your score.
- Loss of Federal Benefits
Trading multiple federal loans for a single private loan often means losing access to federal protections, such as income-driven repayment (IDR) plans that can help lower payments or the option of loan forgiveness. If you lose those federal privileges, you may face higher monthly payments that make it harder to keep up with your bills.
Can Student Loan Forgiveness Improve Your Credit Score?
Student-loan debt forgiveness can be a huge relief, but it can also temporarily lower your credit score, since closing credit accounts reduces your credit mix and average credit account age.
There are also other credit-specific elements of loan forgiveness to be aware of:
- Forgiveness Terms
In specific situations, like public service or school closure, federal loans may still be officially discharged. In other cases, forgiveness isn’t possible.5 It’s also worth noting that recent changes in federal rules may make student loan forgiveness less accessible in general.6 As requirements shift, it’s important to stay informed and have a plan in place to keep your repayment strategy on track.
- Negative Marks
If your loan is in good standing when it gets forgiven, your credit report generally doesn’t show negative marks. But if you made late payments, those usually still appear even after the loans get wiped out.
- Payment Obligations
Unless you have official confirmation of forgiveness or discharge, you’re typically still legally required to make your payments.
Student Loan Payoff Strategies
Building a strong payment history to boost your credit isn’t the only reason to pay down your student loans. You may also want to save more on interest, send more cash toward an emergency fund, or invest for retirement.
To help balance these goals, you can look into these straightforward payoff strategies:
- Making Payments During Your Grace Period
Putting cash toward your loan before your six-month grace period ends (the allotted time between graduating and finding a job) can reduce the total interest you pay over time.7
- Paying More Than the Minimum
If you’re able, sending extra money each month can help you clear the debt faster and lower overall borrowing costs.
- Enrolling in Autopay
Setting up automatic payments during your official repayment period helps make paying bills easier by guaranteeing you never miss a due date, and many lenders may even reduce your interest rate up to 0.25% for doing so.8 - Exploring Debt Relief
If you simply cannot afford the payments, you can reach out to your lender immediately to ask about any available debt relief programs before you miss a payment.
Frequently Asked Questions
If you default on federal student loans, it’s possible that the government may garnish your Social Security disability benefits (SSDI)—along with your tax refunds—to collect the debt.9 However, private student loans are different, and private lenders generally cannot directly garnish your Social Security retirement or disability benefits.10
Your student loans don’t magically disappear when you reach a specific age. Instead, forgiveness timelines depend on how long you’ve had the loan and what repayment plan you use. Depending on the plan, it could take anywhere from 20 to 25 years of payments before loans are forgiven.11
The seven-year rule may refer to how long negative information, such as missed payments or defaults, remains on your credit report. If your student loan becomes delinquent, that negative mark usually sticks around for up to seven years from the date of your first missed payment.
The Takeaway
When it comes to student loans, it may feel like you and your credit scores are on a financial rollercoaster, but you’re not the only consumer on that ride. Millions of borrowers work to make their monthly payments on time to build stronger credit, and even if you hit a few snags, using practical payoff strategies and communicating with your lender can help you stay on track and find solutions. With planning and perseverance, you can keep your credit moving in the right direction.
1,2,3 “Credit scores will drop for more student loan borrowers, data shows,” Bankrate
4 “How Long Does Information Stay on My Equifax Credit Report?,” Equifax
5 “Student Loan Forgiveness,” Federal Student Aid
6 “Is student loan forgiveness possible under Trump? Experts aren’t sure,” Bankrate
7 “In Grace,” Ed Financial Services
8 “Auto Pay,” Ed Financial Services
9 “Collections on Defaulted Loans,” Federal Student Aid
10 “Which debts can't be garnished from your Social Security? Here are 4 to know,” CBS News
11 “Student Loan Forgiveness (and Other Ways the Government Can Help You Repay Your Loans),” Federal Student Aid
Sara LoPiccolo is a freelance writer who specializes in financial and medical education, focusing on medical, legal, and regulatory guidelines.
All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.
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