"Ask the Expert": Does Having High Student-Loan Debt Hurt My Credit Score?


A reader with more than $175,000 in student loans wonders whether having so much debt will hurt his credit score. The good news is the total amount of your loans isn't as much a factor in calculating your credit score as is your ability to repay them.

Q: I have more than $175,000 in student loans. Does having so much debt hurt my credit score?A: For many graduates, taking out a student loan marks the beginning of their official credit history. Credit-rating companies consider student loans installment debt -- in the same category as a mortgage or home-equity loan. Though you may have hundreds of thousands of dollars in debt, the size of your student loans isn't as much a factor in calculating your credit score as is your ability to repay it. This is why it's so important to never miss a payment to any lender.

Many students ding their credit scores quite by accident because they miss making their first student-loan payment -- often because they weren't aware it was due. Students move, addresses on file aren't kept up to date, and payment notifications get lost in the mail. To avoid this, make sure you keep careful records on all of your outstanding student loans, and notify lenders when you move.

If you're in a financial bind and you miss a payment, your credit score could drop by as much as much as 50 points. But if you enter a deferment or forbearance program with your lender, it shouldn't adversely affect your score. Credit-scoring companies generally view these as temporary programs and so generally don't factor them into the scoring. If you're struggling to make payments, contact your lender to explore available debt-relief programs immediately before you miss a payment. To learn more about credit scores and how they're formulated, visit

Have a question about your finances? Write to Terri Cullen and PMD's team of financial experts at

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