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What is a Student Loan Credit Score?

If you’re one of the many students who use student loans to fund their education, it’s important to know your credit score. Many lenders have eligibility requirements regarding a borrower’s credit score. Having a better score can make you more likely to receive a student loan. Continue reading to learn more about a student loan credit score! 

Related: Credit Karma review

What is a credit score?

The Department of Education defines a credit score as “a statistical number that evaluates a potential borrower’s creditworthiness.” 

Student loan lenders use credit scores to evaluate how well a borrower will repay their debt. Credit scores range from 300 – 850. Many factors such as debt-to-income ratio and repayment history contribute to a credit score. The higher the score is, the more trustworthy the borrower.

See also: How do student loans affect credit?

What student loans need a credit score?

Whether there is a credit requirement for a student loan depends on the type of loan. 

Federal student loans

Federal student loans are loans from the Department of Education. These loans are available for anyone who fills out the FAFSA. Federal student loans do not have any credit score requirements.

However, federal PLUS loans require a credit check. The credit check isn’t based on the credit score. It focuses on the borrower’s credit history. Borrowers with an adverse credit history may have more difficulty receiving a PLUS loan. An adverse credit history includes bankruptcies, foreclosures, or multiple late payments. 

See also: How long does it take to build credit?

Private student loans

Private student loans are disbursed by privately owned organizations such as banks. Companies that award private student loans can set their own requirements for eligibility. Often, a high credit score is a requirement. 

A borrower’s credit score can also determine the interest rate and terms of a private loan. A higher credit score may earn a borrower a lower interest rate. 


Student loan refinancing is trading multiple student loans for a single private loan. The lender pays off the loans and you pay the lender back with one loan that combines the balances. Refinancing can help borrowers get a lower interest rate and has the convenience of a single monthly payment. Since refinancing is done through a private lender, there are credit score requirements. 

See also: Student loan consolidation vs. refinancing

What credit score is needed?

The exact credit score that is required varies from lender to lender. Most lenders have a minimum of 670. Lenders are more likely to approve applicants with a credit score in the high 700s. According to LendEDU, the average credit score for approved borrowers in 2020 was 748.

Refinancing also has a minimum credit requirement in the upper 600s. According to Experian, 670 is the base credit score to refinance. Earnest, however, requires a minimum credit score of 650 to refinance.

Like other private student loans, a refinancing applicant with a credit score in the 700s or 800s is more likely to be approved. A higher credit score can also earn you a lower interest rate on the new loan. 

What if you don’t have credit?

Students with bad or no credit aren’t totally out of luck. Applying with a co-signer can raise their chances of being approved. A co-signer is someone who takes on equal responsibility for the loan in the event that the student struggles to make payments. The co-signer must have excellent credit and meet all of the lender’s other requirements.

If you are thinking ahead towards student loans in the future, there are many ways that you can start building credit now. This can have a host of advantages, including lower interest rates and less work to find a co-signer. Applying for a student credit card can be a great first step. Most of these cards have low credit score requirements and help show lenders that you are responsible. You can even earn points back on your purchases!

Related: Should college students have credit cards?

Income share agreements

Students without a co-signer and with a limited credit history would do well to look into the option of income share agreements. While they are not available for every field of study, they can be a great alternative to traditional student loans and they typically weigh credit scores less heavily.

Rather than agreeing to pay back a certain amount that you borrow, income share agreements involve promising a certain percentage of your future income towards your provider. So, you’ll pay a flat percentage of your income for a set number of years (usually between 5 and 10) after graduation. Students who do not meet a minimum income threshold will not have to pay until they increase their salary.

Income share agreement providers typically base their lending decisions not on a borrower’s credit history, but rather, their future earning potential. They gauge this by their major, the program they’re in, and typical employment rates and salaries for graduates of said program. So, if you qualify for an ISA, you will be able to bypass many of the credit score requirements for loans.

Also see: Stride ISA review

Do your research

In conclusion, federal student loans do not need a credit score. If you need to take out private loans, be sure that you have the necessary credit for the lender. Applicants who don’t meet the credit requirements can apply with a co-signer. Do your research and select the lender that best suits your needs! Our guide to applying for student loans will help you through the process, regardless of your credit situation.

Don’t miss: Scholarships360’s free scholarship search tool