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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Paying back thousands or tens of thousands of dollars in student loans can take years, and it can take a toll on your finances. But while student loan debt can be a burden, it can also help you build credit. Here are a few ways that can give your credit a boost. The biggest factors that affect your credit score
Your credit score is determined by how responsibly you use your credit and how long you’ve had it. are broken down into the following categories: Payment history (35 percent): The timeliness of your past payments. Amounts owed (30 percent): The percentage of your available credit that you owe at any given time. Length of credit history (15 percent): The average length of your credit accounts and how long it has been since you’ve used your accounts. Credit mix (10 percent): The number of different types of credit you hold. New credit (10 percent): How frequently you open new accounts. How to improve your credit with student loans
Your credit score represents your creditworthiness, and it affects everything, from interest rates on credit cards to your ability to rent an apartment. If you have student loans, there are a few things you can do to ensure that you’re building a higher score. Pay on time
Because payment history makes up such a large part of your credit score, it’s imperative that you stay on top of your student loan payments. Making timely payments is one of the best ways to use your student loans to build credit – by being consistent with your payments, you’ll begin to see your credit score rise over time. To help you stay on track, you can often set up autopay with your lender; doing so will ensure that you pay on time every month and could also get you an interest rate discount. If you’re having trouble making your payments every month, you can also look into adjusting your repayment plan. With federal student loans, you can sign up for an to lower your monthly payment, or you could apply for to temporarily pause payments without affecting your score. into a lower interest rate or monthly payment could also help you manage your loans month to month. Diversify your credit mix
While you should never take on student loans with the sole intention of improving your credit score, they can benefit your credit mix — the number of different types of credit in your name. For instance, if you have both a student loan and a credit card open at the same time, your credit score may see a bump. Make many years of timely payments
Your credit score will rise along with the average age of your accounts. Having accounts open for many years could improve your credit score over time. Federal student loans have a standard repayment term of 10 years, and private student loans often have options ranging from 10 to 20 years. Making payments on your student loans for that length of time will boost your score, especially if you’re new to credit. The bottom line
Student loans can play a positive role in building good credit — as long as you keep up with your payments. By building your credit, you may qualify for cheaper student loan refinancing rates, helping you save money on your student loans overall. Having good credit can also help you in other areas of your life. You might be eligible for a lower rate on a or , or you may qualify for travel rewards or . Your credit score touches most parts of your financial life, so prioritize your student loan payments to ensure that you don’t fall behind. Learn more
SHARE: Zina Kumok has been a full-time personal finance writer since 2015. She’s a three-time nominee for Best Personal Finance Contributor/Freelancer at the Plutus Awards and a two-time speaker at FinCon, the premier financial media conference. Chelsea has been with Bankrate since early 2020. She is invested in helping students navigate the high costs of college and breaking down the complexities of student loans. Related Articles