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Student Loans: Debt, Your Credit, and Consolidation

Student loan debt can affect your credit score and the way you use your credit cards, but debt consolidation can help

The search for professional improvement is essential for many. However, paying for a university degree in the United States (USA) is an economic challenge that involves the whole family and affects even several years after graduation.

That happens with student loans.

Many families and students turn to student loans, whether private or federal. This means that when students graduate, they earn a degree, but also a large debt which reaches, on average, $25,250.

Federal student loans

According to the Federal Trade Commission (FTC), federal student loans “are subject to the supervision and regulation of the federal government”, these include direct loans from the US Department of Education, loans from the Federal Family Education Loans (FFEL) and Federal Perkins Loans.

private student loans

According to the FTC, private student loans are those that are offered by private lenders and do not offer the same benefits and protections as federal loans. They are also called “alternative loans”.

Student loans and credit

Federal student loans, whether subsidized or not, do not require a good credit score when you apply. Why? Because these loans are generally taken out by young students who don’t even have the credit history to qualify for the money they need.

You don’t need a credit score to apply for student loans, but that doesn’t mean student loans are unrelated to your credit. Depending on how you pay off your student loans, they will have a huge impact on your credit score. They can help you improve or deteriorate your credit.

How student loans help your credit score

You don’t have to be fresh out of school to take out a federal student loan, but most people who apply are in exactly that situation. With this in mind, it’s not surprising that the federal government decided that you should be able to take out these loans, regardless of your credit score.

So there’s a good chance that you don’t really have a great credit history when you take out these loans. For that reason, paying your student loans on time provides a good way to build credit.

If you can’t, then your credit score can really suffer, because instead of building a good credit history, the loans will be building a bad one. Lenders and creditors will not trust you to pay your debts. You will either not be approved for loans and lines of credit, or you will face very high interest rates and harsh conditions.

Make sure your student loans don’t ruin your credit

The problem that students face today is that they cannot repay the amount of student loans that they have taken, with the income that they can earn in today’s job market. High tuition costs and expenses lead to a large number of loans that typically have to be repaid about six months after graduation or at the end of a full-time class program. Payments end up exceeding the ability to pay you can afford each month.

If you can demonstrate financial hardship, you should be able to apply for a federal student loan deferment. . This will allow you to defer your loan payments for a period of time, without falling into default or risking damage to your credit. Then, once you have enough income, you’ll start paying and you can pay off the debt.

Another solution is to consolidate your student loans. This works the same way as with credit card debt consolidation, the only thing that changes is the origin and type of debt. All of your federal loans are included in one payment that is much less than what would be paid in full with all the separate payments.

Do you still get a benefit for paying off the consolidated debt in full?

Yes! Whether you’re talking about consolidated credit card debt debt or student loan debt, you’ll always benefit when you pay your debts in full on a payment schedule that your creditors and lenders have set up with you.

Debt consolidation is rebuilding your debt payments so you pay less each month, but still pay everything you owe in full. So, as long as your creditors or lenders approve the schedule for reducing payments, you’ll “get credit” on your credit history for getting your debts paid off.

In that sense, debt consolidation can help repair your credit that was damaged after you stopped paying your student loan or credit card debt. Because you can use student loan consolidation and debt management programs, even with bad credit. These solutions offer you a way to get out of debt and build your credit score again at the same time.

Student loans and debt consolidation

Student  loan consolidation  can save you a significant amount of money. The less interest you pay on your student loans, the faster you can get out of debt! Interest rates for student loan consolidation programs are at record lows, and it costs nothing to consolidate. Why wait then?

American Student Loan Consolidation Corporation is the nation’s preeminent company specializing in consolidation loan education. Working with the nation’s largest guarantors and lenders, our staff and management are thoroughly trained to answer your questions regarding student loan consolidation loans and to ensure you get the best plan for your needs.


  • Lower your monthly student loan payments so they are more within your budget
  • The lowest and most fixed interest rate, historically, on the student loan that will never increase
  • There are no commissions or charges to consolidate
  • Fixed interest rates of approximately 2.875 to 4.25% for the life of the loan (if you haven’t previously consolidated any of your student loans)
  • No credit check or income verification
  • No prepayment penalty
  • Choice of payments: level or graduated
  • Deferrals in case of financial difficulties or unemployment
  • One convenient monthly payment
  • Increasing the borrowing capacity for mortgage loans by reducing the debt-to-income ratio
  • Online Consolidation Loan Calculator
  • A single company will service your loan throughout the life of the loan
  • Request applications online or by phone at no charge
  • Online Completion of Your Student Loan Consolidation Application
  • Personal support with our simple one-page app


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