Ways Student Loans Can Help or Hurt Your Tennessee Credit Score

No one really looks forward to paying student loans each month, but what many people do not realize is how much student loans can harm their credit score if payments are missed. At the same time, not everyone realizes how much student loans can also help their credit score as long as certain actions are taken. Finding the fine balance between these two means being aware of what you can do to help your credit score. If you ever run into financial problems like bankruptcy, be sure to talk with a Tennessee bankruptcy attorney for guidance.


Starting with the aspect of student loans you are likely more concerned about, there are several ways student loans can hurt Tennessee credit scores. One of the more obvious ways this can happen is if you either miss a student loan payment completely or fail to make the payment on time. Even missing a payment for the very first time has been known to decrease credit scores by a little over 100 points.

The one factor in this area that will not affect your credit score is forbearance and deferment of your student loans. A second factor that can negatively affect your credit score that is less well known is having multiple student loan accounts. What this can do is increase your debt-to-income ratio which can make qualifying for other loans challenging.

If you are seeking assistance with a private student loan, think twice because this can indirectly cause small decreases in your credit score. These small decreases are caused by private lenders running credit checks on you. Each credit check slightly decreases your credit score.


While there are many potential negative consequences of student loan repayment, there are also benefits of student loan repayment in Tennessee. As long as you make every student loan payment on time and in full, the student loan repayment process will slowly build your credit score up by building a history of trust that you will make every payment on time. This is exactly what future creditors are looking for.

You have the potential to prove your ability to keep your word on paying back loans. This will lead to future loan approvals and repayments which will also help build your credit score even higher. Your credit mix can be improved by paying student loans and other loans off at the same time. Do not panic if you miss one or two payments. Student loans in Tennessee give you several years to rebuild damaged credit scores.


Maintaining a positive credit score can be challenging when you are fresh out of college or grad school, struggling to find a job and make ends meet. Consider seeking help from our legal team in Chattanooga, Tennessee, and North Georgia if you ever find yourself falling closer to bankruptcy. Contact Tom Bible Law to speak with a Bankruptcy lawyer in Tennessee today at (423) 690-7712 for a free consultation. Our team of Tennessee bankruptcy attorneys is located in Chattanooga and Tullahoma.

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