What Credit Score Do I Need for a Student Loan?

There are no credit score requirements if you’re planning to use federal student loans. However, private student loan lenders will almost always consider your credit score. While the specifics vary by lender, you’ll often need a good credit score to qualify on your own.

Some private lenders allow students with no or low credit scores to add a well-qualified cosigner to the loan, but it’s essential to understand how this works. We’ll discuss common minimum credit score requirements and other factors used in the student loan approval process.

What credit score do I need for a federal student loan?

Students should apply for federal student loans before turning to private loans. Federal student loans come with more benefits, including forgiveness programs and income-driven repayment plans, and fewer credit requirements.

Here’s a breakdown of credit requirements for all federal student loans.

Federal loan	Minimum credit score?	Credit history requirements
Direct Subsidized Loan	None	None
Direct Unsubsidized Loan	None	None
Grad PLUS Loan	None	No adverse events
Parent PLUS Loan	None	No adverse events
Direct Consolidation Loan	None	None

When the government passed the Higher Education Act of 1965, it made clear that it was responsible for offering students affordable financial aid to earn a college education. Because most high school students don’t have an established credit history, a minimum credit score was never established to determine eligibility for federal student loans.

Because federal student loans don’t have minimum credit score requirements, it can be helpful to help work on your child’s credit score while they are in high school—for example, opening a credit card in their name for small purchases.

Kyle Ryan

CFP®

While federal loans are easier to get than private student loans, most federal loans have lower annual and aggregate limits than private ones. The annual federal student loan limit for undergraduate students ranges from $5,500 to $12,500, depending on your year in college and dependency status.

The annual limit for graduate students on a Direct Unsubsidized Loan is $20,500, and the annual limit for a Direct PLUS Loan is the cost of attendance less any other financial aid.

There is no minimum credit score to receive a PLUS Loan. Instead, the government will check for the following on your credit report:

• Loan balance of more than $2,085 that is 90 days late
• Loan in default 
• Debt discharged in bankruptcy
• Foreclosure
• Repossession
• Tax lien
• Wage garnishment
• Write-off of a federal student loan

If you’ve had one or more of these adverse events on your credit report within the past five years, you may have to explain to the U.S. Department of Education what caused the event. It will determine whether your reason is sufficient and whether you qualify for a PLUS loan.

If the reason doesn’t satisfy the requirements, you may need to add an endorser to the loan, which is similar to a cosigner. An endorser becomes legally responsible for the loans if you default. 

To check your eligibility for federal student loans, you’ll fill out the Free Application for Federal Student Aid (FAFSA). If you reach the annual or aggregate federal loan limit, you can apply for a private student loan to fill in the gaps. 

Your credit score will become a factor if you need a private student loan.

What credit score do I need for a private student loan?

Unlike federal student loans, private student loans have strict credit score requirements. As for-profit institutions, private lenders put a lot of effort into determining your ability to repay your loan—and checking your credit score is a reliable way to do this.

Most credit scores range from 300 to 850, with the higher range reserved for borrowers who demonstrate responsible credit behavior, such as repaying old loans in full and on time. For this reason, lenders often require a minimum credit score between 650 and 700 for a private student loan.

If you don’t have a credit score of at least 650, you’ll likely need to add a creditworthy cosigner to your loan. When you do this, the lender will use the cosigner’s credit score and history to determine eligibility.

Here are the minimum credit scores to get a private student loan from several popular lenders:

Lender	Minimum credit score
College Ave	Mid-600s
Earnest	665
SoFi	650
Ascent	580

Our expert’s advice to build credit in your college years

Kyle Ryan

CFP®

Having student loans in your name is a good place to start building your credit. This will establish account history (age of credit) and open up multiple types of credit lines, which is good for one’s credit score. To plan ahead, consider getting a credit card with a small line of credit you can use to cover small expenses, such as gas and groceries. This will build your credit score. Just be sure to pay off all debts in full and on time. Be wary of opening too many lines of credit through hard inquiries: This can damage your credit score.

Your credit score is one of several factors a lender considers. So, you may meet the minimum credit score requirement with a lender, but that doesn’t guarantee approval.

Here’s a breakdown of how likely a borrower is to be accepted for a private student loan by FICO credit range:

• 649 or lower: Your options in this credit range may be limited. Most lenders will expect you to add a cosigner to be approved for the loan. Check out our picks for bad-credit student loans.
• 650 to 690: Borrowers will have more options in this category but will still be better off adding a cosigner; approval will likely only be for loans with higher interest rates.
• 691 to 720: You’ll have a chance with most lenders, even without a cosigner.
• 721 and higher: With a credit score in this range, you can consider the best private student loans and have the highest chance at the lowest interest rates.

What credit score do I need to refinance student loans?

When you refinance student loans, you’re taking out a new private student loan and using it to pay off any student loans you have. In most cases, borrowers refinance to lower their interest rate or monthly payment.

To use private student loan refinancing, you’ll need to undergo a credit check and meet other credit criteria to be approved. Most lenders require applicants to have good or excellent credit. If you don’t meet the lender’s requirements, adding a well-qualified cosigner might help you qualify.

If you have federal student loans, refinancing with a private lender will convert them to private student loans. Refinancing will also mean relinquishing federal benefits, such as income-driven repayment plans, long forbearance periods, and loan forgiveness programs.

Here are the credit requirements from three popular student loan refinancing lenders:

Lender	Minimum credit score
ELFI	680
Laurel Road	Generally, a good credit score (often at least 700)
Earnest	665 to 700

What other requirements do private lenders have?

Your credit score isn’t the only factor private lenders consider, though it’s one of the most important. The lender must evaluate the likelihood you’ll repay the loan. Other factors lenders evaluate include your income, citizenship, enrollment status, and whether you have a cosigner.

To qualify for a student loan, you’ll generally need a good credit score and to meet student loan eligibility requirements such as the following: 

• Stable and sufficient income: The lender needs to see that you’re willing to repay the loan—this is what a credit score helps establish—and that you can do so. Your job history, income level, and debt-to-income ratio help the lender decide whether you can repay the loan.
• Citizenship: Many private lenders also require the student to qualify as a U.S. citizen or permanent resident. If you have DACA status, you may be able to qualify for a private loan with a cosigner who is a U.S. citizen or permanent resident. 
• Creditworthy cosigner: Even if a student has good credit, they may not qualify if their income is too low or irregular. A well-qualified cosigner with good credit and a stable job may be required. Also, most international students may need a cosigner who is a U.S. citizen or permanent resident.
• Enrollment status: You’ll also need to show how many courses or credit hours you plan to take each term. Many lenders will approve borrowers who are part-time students, often taking at least two or three classes per semester. A few lenders only accept full-time and half-time students.

Some lenders only issue student loans if you plan to attend an approved school or major in specific fields of study. Their goal is to do their best to only loan money that can be repaid. One way to do this is by limiting loans to schools and programs students are more likely to complete.

Our expert recommends these financial habits

Kyle Ryan

CFP®

One, always pay off credit balances (at least the minimum) to avoid late fees and penalties against your score. Two, open up different lines of credit early, just not too fast. Have a credit card, student loans, and other types of debt. Three, monitor your credit score, and understand how it works. Don’t have too much credit utilization; if you do, try to increase your line of credit. Always do this when possible. Four, show income. Income is the first step to having any credit score and being approved for future loans or lines of credit. And five, don’t close out accounts unless you have to. Multiple accounts are positive for your credit score.Always pay yourself first, and do not take on more debt than you can afford. It sounds simple and obvious, but depending on your spending habits, this is the beginning of a treacherous or prosperous road.

Before you apply for a private loan, read through the lender’s requirements and make sure you meet them. Understanding how student loan underwriting processes work can also help you prepare to qualify.

Can a cosigner help you qualify for a private student loan?

Adding a well-qualified cosigner will almost always help you get approved for a loan. And even if you can qualify for a student loan without a cosigner, including one with your application may help you get a lower interest rate than applying by yourself.

When you add a cosigner, the lender uses the creditworthiness of the cosigner to determine whether you’re approved for the loan and help establish the rates and terms. It works this way because your cosigner agrees to repay the loan if you don’t. 

The lender is taking less risk since someone besides you has stepped up and agreed to take the loss if you don’t pay. In exchange, the lender can charge a lower rate or offer better terms on the loan.

A cosigner can be any adult (not just a relative) who meets the lender’s requirements. They usually need a good credit score, sufficient income to support the loan, and U.S. citizenship or permanent residency.

Tip

Keep in mind that you’re asking the cosigner to take on significant risk by getting the loan with you. If you don’t repay the loan or make late payments, it will damage your cosigner’s credit, which could hurt the relationship. 

Does cosigning a student loan affect the cosigner?

Student loans affect your credit score, and they can also affect your cosigner’s. When someone cosigns a loan, it will appear on their credit report. It shouldn’t harm their credit score over the long term unless you miss payments or default on the loan.

Cosigning will affect the cosigner’s debt-to-income ratio (DTI)—the total monthly debt payments divided by the total monthly gross income—because the cosigner has agreed to pay the loan if you do not. This could make it harder for the cosigner to qualify for a mortgage or other loan. 

Before adding a cosigner, see whether you can find a lender that allows you to release the cosigner after meeting certain repayment conditions. A cosigner release is when the lender removes the cosigner from the loan. When this happens, it no longer shows up on their credit report.

If the lender you choose doesn’t offer cosigner release, the only way to remove the cosigner from the loan is to refinance with a new lender.

Student loan and credit score FAQ

Why do lenders check your credit?

A credit report is like a financial report card. It shows every loan, line of credit, and credit card you’ve ever had. It will also show every credit application you’ve made for the past two years. And if a credit report is a report card, a credit score is like a GPA. A single number shows how trustworthy you are to lenders. 

Before approving your loan application, lenders view your credit score to determine whether you’re a responsible borrower. A credit score is one of the best indicators of reliability. If you’ve missed payments or defaulted on a loan, it’s reflected on your credit report.

The following factors make up a credit score:

• On-time payments: 35%
• Credit utilization: 30%
• Length of credit history: 15%
• New credit: 10%
• Credit mix: 10%

Credit mix gets into different types of credit, and “new credit” refers to the number of inquiries one has. For credit utilization, a ratio of 10% to 30% will have a positive impact on your score.

Kyle Ryan

CFP®

The two main companies that compile information from the three credit bureaus to make up credit scores are FICO and VantageScore. FICO scores are used in more than 90% of cases. If you’re viewing a free credit score, you’re likely seeing the VantageScore and not the FICO score.

Both companies have similar scoring algorithms, but you might notice a slight discrepancy between the two.

How do I find my credit score?

Equifax, Experian, and TransUnion are the three credit bureaus that compile credit information. FICO and VantageScore take information from those three companies and turn it into credit scores.

There is no one credit score. Each consumer has dozens of credit scores because different scoring algorithms exist for different types of loans.

You can find a free credit score from CreditKarma and similar sites. Many banks and credit card providers also offer free credit scores even if you’re not a customer. You can sign up to get weekly or monthly notifications about your credit score to see how it’s changed. You can also see how you score in each factor mentioned above and what may be hurting or helping it.

Should I improve my credit score before applying for a student loan?

If you need to take out a private student loan, increasing your credit score could help you get approved and receive a lower interest rate.

Improving your credit score is straightforward. First, make sure to pay all your bills on time. Any late payment in the past 30 days will appear on your credit report and could cause your credit score to drop by as many as 180 points.

Avoid applying for new credit accounts unless they improve your credit utilization. This can decrease your average credit age otherwise. Also, too many new accounts look suspicious to a lender. View your official credit report and see whether errors could affect your score.

It can take several months to fix or build your credit. If you don’t have that time, adding a cosigner with a better credit score can help improve your odds of approval.