Key takeaways
- Federal student loans don’t have minimum credit score requirements, and most of them don’t require a credit check.
- Minimum credit score requirements for private student loans vary by lender.
- You generally need a good credit score — often defined as a FICO score 670 or greater — to qualify for a private loan.
Student loans are the one corner of consumer finance where your credit score doesn’t always dictate your ability to borrow, especially if you take out federal student loans. Except for Direct PLUS loans for graduate and professional students and the parents of undergraduate students, there is no student loan credit score requirement included for federal student loans.
However, private student loan lenders, typically banks, credit unions and online lenders, often require a credit score of at least 670. The qualifications process may vary slightly from lender to lender for private student loans. However, the higher your credit score, the more likely you are to qualify and obtain a competitive interest rate.
What credit score do you need for federal student loans?
Federal student loans do not have any credit score requirements. That makes sense, given that many people entering college have yet to establish credit histories.
The only type of federal loan that will check your credit history is federal PLUS loans — with these, the government will check for adverse credit history, although there is still no minimum credit score requirement. Those who have a less-than-perfect credit history, however, may need to meet additional requirements to get approved.
The plus side of this approach to federal loans is that it allows most students to receive funding if needed. Federal loans set one interest rate for all borrowers, so having a poor credit score will not affect your loan rate or terms.
What credit score do you need for private student loans?
While federal loans are usually a better deal, many people turn to private lenders for additional funding. Private student loans, including refinance loans, usually require a credit score of at least 670. However, knowing the precise requirements is tricky because private lenders are not always forthcoming with this information. Oftentimes the only way to find out if you qualify is to apply.
Some lenders offer prequalification, which allows you to see if you are eligible for a student loan without the lender pulling a hard check on your credit. This means you can see if you might qualify without lowering your credit score. Take advantage of these offers as much as possible when shopping with private lenders.
| Lender | Credit score required |
|---|---|
| College Ave | Mid-600s |
| Earnest | 650 |
| SoFi | 650 |
| ELFI (Education Loan Finance) | 680 |
Information accurate as of June 19, 2024. Check the lenders’ websites for possible updates.
How your credit score influences your student loan rate
When you apply for a private student loan, lenders review your credit score and history to assess how well you’ve managed money in the past. A good credit score — often defined as a FICO score 670 or higher — indicates that you’ve done a good job managing debt and are likely to repay your loan. As a result, in general, the higher your credit score, the better your approval odds and chances of qualifying for a lower rate.
On the flip side, if you have poor or minimal credit, your chances of qualifying without a co-signer are much lower than someone with good credit. Plus, even if you qualify for a loan on your own, a lender will most likely charge you a higher interest rate and fees to compensate for the higher probability of you defaulting on the loan.
Although lenders use various credit scoring models, most of them consider your FICO score when reviewing your application.
Can you get a student loan with bad credit?
Unlike many other forms of borrowing, it is possible to get a federal student loan even with a less-than-ideal credit score. Except for the Direct PLUS loans, which are designed for graduate students and parents, there is no minimum credit score to get a student loan.
Private student loans, on the other hand, will consider your credit score for student loans as part of the approval process. If you intend to pursue private loans with a poor credit score, start by shopping around and looking for lenders that have more flexible credit score requirements.
Enlisting the help of a co-signer can also allow you to access student loans from private lenders as long as the co-signer has a good credit history. If you choose to take this approach, be sure the co-signer understands that their credit is on the line should you default on the loan.
How to check your credit score
You can check your credit score in various ways. For example, you could check it for free by visiting FreeCreditScore.com, a website owned by Experian, or myFICO.com. However, note that some websites offer paid access that comes with additional perks like access to multiple credit scores.
Plus, many credit card issuers, like American Express, provide free credit score access to card members.
How to improve your credit score
Taking steps to boost your credit before applying for a private student loan could help increase your approval chances and help you secure a lower rate. The most important step you can take is paying all of your bills on time — payment history represents 35 percent of your FICO credit score.
Another action you can take is to pay down debt to lower your credit utilization ratio. This is because your amounts owed accounts for 30 percent of your FICO score, and credit utilization is part of the category.
The bottom line
While your credit score will not be a factor when applying for most federal student loans, private lenders consider credit history as part of the application process. If you hope to obtain a private student loan and have less-than-ideal credit, consider finding a co-signer with a better credit profile. If you don’t need the private loan right away, work on improving your score first and then apply so that you qualify for the most competitive interest rate possible.
