If you're not a homeowner or you have very poor credit, consider debt relief instead of a mortgage.

1) Type of debt:

Credit Card Debt
Student Loan Debt
Tax Debt
Other Debt

2) What State do you live in?

 
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Building Credit

A mountain of debt may look scary, but paying off your loans in a timely manner is great for your credit and your financial future. Good credit can help you finance larger purchases in the future.

Credit Report Essentials
Your student loans are listed with all other loans and basic financial information on your personal credit report. Your personalized credit report contains specific information about each of your student loan repayments and credit accounts, including:

  • Account creation date
  • Credit limit
  • Total credit or remaining balance
  • Monthly payment plan
  • Any late payments or problems

When potential lenders, leasers, or banks view your credit report, they can see this important information about your credit history. The information in your report also contributes to your credit rating, which directly affects your ability to get financing. Paying your debts on time shows lenders that you can be trusted with the financial responsibility of larger loans.

Avoiding Credit Trouble
Your student loan will go into default if you are over 270 days late in making a monthly payments. The consequences of defaulting on your loan are severe:

  • Your account can be turned over to a collection agency
  • Your entire balance can become due immediately
  • Your income tax refund can be withheld
  • The government can place a hold on your wages
  • You can lose future deferment options
  • You may have trouble securing future financial aid

Defaulting on your loan can affect your credit rating for years, and may prevent you from getting a loan, a credit card, an apartment, and even a job. If you're worried about defaulting on a loan, contact your lender immediately to see if they offer emergency deferment options during your financial need.

If You Go Into Default
It's possible to mend your credit after a loan goes into default. Contact your lender, and you may be able to set up a schedule for more reasonable monthly payments. After you've made nine to twelve payments on-time, it may even be possible to have the default status removed from your loan. Form a friendly relationship with your lender and don't feel nervous about asking clarification questions. Your financial future is important, and you should know the details.

Payments and Tax Breaks
You may be able to deduct up to $2,500 of student loan interest on your Federal tax return. You won't be eligible for the deduction if you can be claimed as an exemption on anyone else's tax return or if you're married and filing separately. Read the deduction eligibility information on income tax Form 1040A or 1040 to see if you qualify for this deduction. For more information on education tax credits, visit the IRS site and look for Tax Benefits for Education.

Protect and improve your financial future by staying on top of your loan payments.