Select's editorial team works independently to review financial products and write articles we think our readers will find useful. We may receive commission when you click on links from our affiliate partners for products.
Potential borrowers with a history of bad credit- or no credit at all- can not qualify for federal student loans, but they will apply for private loans. Most federal student loans do not require a credit check, so they are the best route to take when studying for poor credit in the first place if you have poor credit. In fact, when you are looking to pay for college, you should start with taking advantage of all the private loans available to you before looking for government loans. Private student loans typically have lower interest rates than government loans and offer more protections for the borrower such as deferment, economic repayment plans and forgiveness programs. Ahead, we break down a few things you should consider when you start looking for college financial aid, and how your credit score could play a role in it.
1; Start by looking for free help. Before you start applying for student loans, first research ways you can get free money to help cover your education costs, such as scholarships, grants and work-study programs.
The more you can take advantage of these programs, the less loans you 'll need to take out. Credit score role: Applying for free funding like college scholarships usually does n't require your credit score information. Next, you 'll want to apply for federal student loans by filling out an online FAFSA form, which you can find here.
Both current and prospective students at both undergraduate and graduate school can see their eligibility for financial aid by entering their personal information and completing the FAFSA form each school year they need help. While the FAFSA Financial form does ask for financial details like your income and savings, it will not ask for your credit score or pull your credit report when you apply. Completing the FAFSA form does n't affect your credit score; for more information on the information you need when applying for federal loans, download this free worksheet provided by the U.S. Department of Education. The exception to this is Federal loans that parents or guardians can take out to help their children pay for college, also known as Parent PLUS loans. These do require a credit check, and the website clearly states that if you have placed a security freeze on your credit file, you must remove or lift the freeze at each credit bureau before you continue. Applications will not be processed if you have a security freeze. Applying for a Parent PLUS loan will result in a frank inquiry on your credit report that could temporarily dilate your credit score a few points. Federal student loans have different borrowing limits depending on a number of factors, such as the type of loan, the school year the loan applies to and whether the student is considered a dependent. Once you have reached the borrowing limit, you may need to consider private student loans to make up the difference.
Credit Score role: There are a variety of banks, credit unions and private lenders that offer online student loans. Most of them require a good credit score in order to qualify. Those with less than stellar credit should check out Earnest for private student loans or refinancing. Earnest accepts some applicants with fair credit. The minimum credit score is 650 and there is no minimum income requirement. As you browse for a private student loan, you may come across a few lenders which have no credit requirements at all or no co-signer requirements. Know that they will still consider your income and are likely to charge higher interest rates than private lenders that do check your creditworthiness. Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the select editorial staff alone and have not been reviewed, approved or otherwise endorsed by any third party.