Complying in a timely manner with student loans can have a positive impact on your credit history. However, one wrong move could take you from heaven to hell in the blink of an eye. It is important to know some things if you do not want things to end more

Student loans impact your credit score to the point that it can take you from heaven to hell in the blink of an eye.

If you manage payments responsibly, they can help you build good credit. Student loans impact three of the five factors that make up a credit score, such as payment history, length of history and credit mix, Gregory Poulin, co-founder and CEO of student loan servicer Goodly, told GoBankingRates.

The question that may arise for many people is whether it is a good idea to refinance student loans. Although doing so represents savings, it also means losing the benefits of federal loans.

To do this, it is advisable to create a positive payment history by paying on time and in full each month. It can also help your credit score start paying off your student loan earlier than expected. It is estimated that the most weighted factor in credit history is payment history, which represents 35%.

Another option that can work is to search for the best student loans that fit your abilities. For this, the duration of the credit must be established for one that is realistic with your payment terms.

Poulin says that having a mix of different credits like a car, credit card, mortgage or student loan with a good track record is also viewed favorably by lenders. Even if you don’t have a long credit history, a good mix of various credits can have a much bigger impact.

While student loans can be good for your credit, they can also easily get you into trouble. If you are not careful with payments or take on too much debt, your credit score can be affected.

The DTI, or percentage of monthly gross income that must be used to pay off debt, tends to increase the more you have to pay monthly. Although this measure is not used to calculate your credit score, it is used by lenders to make decisions.

It’s also important to avoid missing student loan payments. The severity will depend on how big it is and how often you tend to default. The later the more damaging the impact will be. For example, if your score is 780 and you’ve never been late on a payment before, but this happens and you’re 30 days late, your score would drop between 90 and 110 points.

The issue can be further complicated if you decide not to comply. If the payment is delayed by at least 270, it is considered delinquent. This may lead to you facing collection activity and you may be sued to collect the debt. The default remains on the credit report for up to seven years from the date of the first delinquency.

Student loan expert Mark Kantrowitz said that in the event of a credit default, you can reinstate the delinquent student loan by figuring out a revised payment with the loan servicer and making nine payments within 10 months.

The US government recently announced a student loan forgiveness program. If you want to know how to apply for the program, click here. If you want to prepare to request the cancellation of your debt, click here.

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