Bad Credit Resource Center

Many students think that walking away on a student loan after graduation is a smart way to get rid of a debt.  After all, they no longer need the money for school and in fact need the money for settling into a job and new home. 

However, defaulting on a student loan is a terrible mistake in almost all cases, because it affects your credit rating very negatively.  If you have student loans, it’s important that you start repaying them on schedule and that you repay them on time.  Doing so will actually improve your credit score.

If you’re having trouble repaying your student loans, talk to your lenders rather than ignoring the problem.  Most lenders will actually give you a grace period after graduation so that you can find a job and settle into post-college life before repaying your loans. 

If you have several loans, your lenders may be willing to help you consolidate them into one larger loan payment that requires smaller monthly payments.   Some lenders will also give you a few months grace in case of unemployment.  Read your loan agreements carefully to find out what the terms of your student loans are.  If you need to, work out a different payment schedule, seek out refinancing, or find some other way to repay. 

Only default on your student loans as a last resort when you really have no way of repaying your debts.  However, be prepared to take a big hit on your credit score.  Once you default on one loan, it really counts against your credit rating - especially since as a new graduate you do not have a long credit history yet.  Common sense will tell you that lenders who see that you have defaulted on one financial responsibility will wonder why you wouldn’t default on their loan, as well. After defaulting on your student loan, you may be unable to get credit for some time and you will have to work much, much harder to re-establish good credit.

fix bad credit

personal loans for people with bad credit