Failure to Pay Off a One-Time Student Loan Can Damage Your Credit History More Than You Think
You will never want to miss any debt payment, but student loans are tricky. Credit.com editor Constance Brinkley-Badgett explains why a student loan late payment can hurt your credit history even more than you think.
As Brinkley-Budgett explains, each payment of your student loan can be reported as a separate account , even if you only make one payment each month. That’s why:
Although a student can only get one federal loan per year, it usually comes in two or more payments. Multiply two or three payments over a four- or five-year period, and those bills go up pretty quickly.
Check your credit report to see if there are multiple accounts for your loan. It may not seem like a big deal, but if you miss a one-time payment, your account can be severely damaged. That’s why:
But what if you are making a late payment against the repayment you make each month? Yes, this multiplier effect can hurt you again, and quite badly. Suddenly, this 30 days late payment shows up as 12 or 15 late payments. Two late payments? Ouch. Your credit score has probably been hit hard.
Of course, it’s best to just make payments on time and contact the lender if you have any problems with it. However, it does help to understand how your student debt affects your loan, so go through your report and see how this loan is reported so you know what to expect.
A Weird Way to Skip Student Loan Payments Can Ruin Your Credit Completely | Credit.com