Learn how student loan repayments really work and affect your credit score.
There are a lot of misconceptions about when you should start thinking about your student loan balance, when you have to pay it back and how it can impact your credit score. Nicole Straub, Senior Vice President of Discover® Student Loans, helps debunk some popular myths.
Student Loan Myth: I don’t have to worry about student loans until I graduate.
Nicole: It’s important for consumers to understand what they’ve borrowed. A few key things to keep in mind: only borrow what you need, use a monthly payment calculator to estimate your payments once you graduate, and making monthly payments while you’re in school can reduce the cost of your loan. Sometimes even making $25 payments a month while you are in school can make a difference in the long run.
Student Loan Myth: If I don’t graduate, I don’t have to pay back my loans.
Nicole: Whether you graduate or not, you must repay your student loans.
Student Loan Myth: My student loans can’t affect my credit score.
Nicole: Student loans can impact your credit score as well as your cosigner’s credit score both negatively and positively. Student loans can be a great way to build credit, which can be an opportunity should you want a home mortgage or auto loan down the line. Making monthly on-time student loan payments is a great way to build credit for future purchases.
