7.5 Mil Student Loans Will Get a Fresh Start & a Credit Score Boost
Channel: Dreams Are A Reality
Date: 2022-04-15

#studentloandebt #creditscore #finances
President Joe Biden is working on and has announced that earlier this month (April 2022) that the pause on federal student loan payments will be extended through August, it presented an additional change that could boost the credit scores of millions of borrowers: pulling them out of default. 

The terms of default vary depending on the type of loan borrowers have, but for most federal loans it means that a payment has not been made in at least 270 days. Expunging the status could boost a borrower's credit score by as much as 100 points, says Ted Rossman, senior industry analyst at Bankrate. Exactly how much a borrower's score will rise depends on their individual financial circumstances.

"It could be really significant, especially for someone whose only blemish is a missing student loan payment," says Rossman. He adds that the potential credit score boost won't be as dramatic for those with other negative marks in their credit history, like a default on a credit card or auto loan payment.

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