The Credit Score You Need to Get a Grad School Loan
Obtaining funding for graduate schoolprograms can be confusing for prospective students. This, however, only gets more complicated when you start throwing credit score requirements into the mix. Many prospective students wonder if there’s a credit score you need in order to get a grad school loan.
How Does Credit Affect Getting Student Loans?
Some people are able to get through their undergraduate studies without having to pay much mind to their credit score. Student loans provided through the federal government don’t have credit score requirements or restrictions; everyone simply receives a flat rate for loans if they qualify for them.
Things are a little bit more complicated when seeking a Grad PLUS loan from the federal government. But it’s still possible to be accepted, even if you have poor credit. What’s more important than your score is not having a rocky credit history that includes things like collections marks or bankruptcies.
Submitting loan applications can get more involved when you start dealing with private lenders. While everyone gets the same rate with federal loans, this isn’t so much the case when it comes to working with private lending organizations. These groups have a profit incentive and want to understand risk profiles before extending loans. Due to this, your credit score (or the credit score of your co-signer) can have a noticeable impact on your ability to secure a private loan—much less one with attractive terms.
Do You Need Good Credit to Get Grad School Loans?
As mentioned in the previous section, having good credit isn’t essential to getting graduate student loans. At the same time, those with serious dings on their credit score will possibly have trouble getting federal loans without a co-signer. With private loans, however, your credit score and the credit score of your co-signer are going to be an essential piece of the process.
Those who need to secure funding beyond federal aid need to consider their options. Working with a company like Juno, which takes bids from a huge pool of lenders to find the best deals for its members, might be one of your best routes.
For starters, finding a private grad school loan that’s both obtainable and affordablecan be exhausting. When using a service like Juno, you don’t have to think about any of that. You either accept the best-available deal they’ve negotiated with their lending partners, or you don’t—simple. There’s a credit score requirement of 650 or higher, which is low enough for many people to qualify. If you don’t reach this bar, you might want to look at some ways you can improve your credit score before applying for grad school loans.
Improving Your Credit Score
You don’t want to put your life plans on hold just because you don’t have a high enough credit score. Those looking for ways to improve their credit quickly should look for the highest-yield moves.
There are several factors that determine your credit score. The two most critical of these are paying your bills on time and not using too much of your available credit. This second one can be accomplished by keeping your credit utilization under the recommended 30 percent. In other words, don’t use more than 30 percent of your credit limit. Opening a new account, or getting a loan specifically designed to help build your credit can be useful for this. In terms of paying your bills on time, this comes down to staying organized and making sure you’re bringing in enough income to cover your expenses.
While there’s no hard-and-fast rule for what credit score you need to get grad school loans, having a higher score will definitely help secure loans from private lenders. Consider all your options for securing grad school loans, and work on improving your credit in the meantime if you have a very low score. This will help in other aspects of your life anyway.