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Stratus Financial

90 Discovery Irvine, CA 92618
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You need this CREDIT SCORE to get approved for a private student loan

Loans are a great way to get your foot in the door when you need financial assistance. But before applying for any type of loan, it’s important that know how much risk is associated with different types and levels of credit scores so you can determine whether or not you want this responsibility.

 

Private student loans are a popular alternative to government-backed financing for higher education. The private sector has more flexibility and often offers lower rates, which can make them attractive options in some cases where federal aid doesn’t apply or isn’t available on an equal footing with state grants and scholarships that may be offered by your school’s financial aid office.

 

There are many private lenders that require high credit scores, but they vary on what exactly a “high” score is. A good place to start would be by understanding what determines eligibility based on one’s personal stats–in other words: What does my FICO score say?

 

Your FICO Score

The FICO Score is like your personal scoreboard that measures how well you’ve been doing financially. It is often used as the standard for private loans and can range anywhere between 300-850 depending on what company or lender sets it. The minimum required credit score is typically 670 or higher.

 

However, many people with good scores may find themselves turned down because their FICO scores don’t meet certain requirements which could be due in large part to missing just one payment on time without reasonable excuses (such as unpaid medical bills).

 

A lower score than 670 or haven’t yet built a sufficient credit history? That’s tough. Applying with a co-signer who has good to excellent ratings might just increase the approval chances for you. Even if they don’t need one themselves, having them as an option can get YOU into school at least partly paid for by someone else. But beware: this will mean sharing responsibility for any loans made together so be sure both parties agree before signing on anything (and remember those high-interest rates).

 

Improving Your Credit Score

 

Consider improving your credit score before taking out a private student loan. If you wait to do so, the interest rates on future loans may be more optimal for both parties involved—and it could also help get approval from lenders who look at these factors when deciding whom they want as customers.

 

Here are some potential strategies for building your credit:

 

  1. It’s important to make on-time payments. Your payment history is one of the biggest factors that make up your credit score, and if it isn’t positive or stable then you won’t be able to gain access to improving over time like with a strong track record for paying bills promptly every month!
  2. Pay down your credit card balances. Keep the number of loans you have open to 25% or less, and if possible below 20%. That way not only will it help improve how much debt collection agencies can collect from interest payments on those accounts but also boost what’s left as an active portion in order for future increases.
  3. If you know someone with good credit (such as a parent or another adult), consider asking them if they would be willing to let you become an authorized user on their card account. As this will allow your own finances access that isn’t limited by what’s available in the marketplace, there might just come times when it helps out.
  4. If you can, avoid applying for new loans when possible. This will help keep your credit score healthy and improve it over time rather than having negative effects on the long-term health of that number by making small tweaks here or there with no real impactful change made throughout an entire lifetime dedicated to building up good habits!

 

Take the next step

 

Ready to apply for a private student loan? We can help! Check out what we can offer at Stratus and we’d be happy to assist. 

 

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