Newly grads who took out student loans to finance their university or college education are faced with the challenge of paying off their debt.
It’s fairly a tall order given that new grads have to live within their means as they transition into the workforce.
I am assuming that since you are here reading this article, you still have some student loans that need to be paid off.
I’m sure that there are instances when you are faced with some financial challenges that the thought of defaulting on your student loans crossed your mind.
So, what if you do default on your student loan?
How would this affect your credit score?
I won’t beat around the bush regarding this.
Not paying your student loans or making late payments can definitely hurt your credit score.
The real question is up to what extent will it damage your credit score?
According to my sources at FICO Score, even just one missed payment on your student loan can negatively affect your credit score.
Now if you miss making payments for months, this will significantly have a negative impact on your credit score. The main reason behind this is that your payment history is a major factor that affects your credit score.
Missed payments stay on your credit report for seven years. In addition, this will be visible to all lenders.
Now, if you have multiple student loans managed by the same servicer, the effect of a missed payment even on one loan account could affect your …
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