Student Loans: 1 30-Day Late, 200+ Point Drop

Why Is This a Problem?

• When you went to college, you got a check each semester for your loan.
• When you left college, your loans showed up on your credit report once for each check you received.
• Yet you only make one payment, not multiple payments for each semester.

Why Is This Important?

• Having so many open student loan accounts dilutes your credit report.
• This makes it harder to improve your credit score when you do things like use a rent reporting service.
• If you have 10 open accounts and add 1 more it's only a 9% increase in payment history; if you have 3 open accounts and add 1 more it's a 25% impact.
• It's like throwing a pebble into a pond and expecting a big splash — it won't happen.
• Consolidating your loans reduces your loans to 1 account — the balance is the same, just merging the loans into one account number.

Avoiding the Student Loan Pitfall

• If you do not consolidate your student loans and you end up with a 30-day late payment penalty one month, all of the student loans on your report will be marked 30 days late.
• Eight student loan accounts will equal eight 30-day late payments.
• Expect your credit score to drop over 200+ points for this one mistake.

How to Resolve This Issue

Visit studentaid.gov to complete the process to consolidate your student loans into 1 account — it takes about 30 minutes.