Student Loans= Higher Credit Scores CT!

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Finally here is some good news for people in their twenties and thirties with student loans. Turns out that these millennials have HIGHER credit scores than their peers!

Whether because they are a higher-educated workforce, or because of the discipline it takes to budget and make agreed-upon monthly payments on time, millennials are better positioned to become home buyers.

Original content by Dave Jones 0789397

Student Loans = Higher Credit Scores

Student Loans = Higher Credit Scores | Keeping Current Matters

According to a recent analysis by CoreLogic, CT millennial renters (aged 20-34) who have student loan debt also have higher credit scores than those who do not have student loans.

This may come as a surprise, as there is so much talk about student loans burdening Millennials and holding them back from many milestones that previous generations have been able to achieve (i.e. homeownership, investing for retirement).

CoreLogic used the information provided on rental applications and the applicants’ credit history from credit bureaus to determine if there was a correlation between student loan debt and credit scores.

The analysis concluded that:

“Student loan debt did not prevent millennials from access to credit even though it may delay their homebuying decisions.”

In fact, those with a higher amount of debt actually had higher credit scores.

“Renters with student loan debt have higher average credit scores than those without; and those with higher debt amounts have higher average credit scores than those with lower student loan debt amounts.”

Bottom Line

CT millennials are on pace to become the most educated generation, with that comes a pretty big bill for education. But there is a light at the end of the tunnel:

“Despite the fact that student loan debt has grown into the nation’s second largest consumer debt, following mortgage, and has created a significant financial burden for millennials, it does not appear to prevent millennials from accessing credit.”


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David Jones
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Mike Bjork
American Pacific Mortgage - Redondo Beach, CA

Paying the loan on  a timely basis over an extended period will improve one's credit scores.  The issues lie with the ever increasing costs of college/universities, which is well above the rate of inflation and the rates that the borrowers are paying for these very high balances.  I was fortunate when I finished college.  I had about $10k balance for my student loans with approximately 6% rate.  Now, it's becoming common place to find students with $60k-$90k in student debt and paying between 8-9% rate.  What's sad is that the Fed's Fund Rate is much lower today than when I finished, so the rates today should be less.  Unfortunately, these payments become like a housing payment.  This is what is making it difficult to qualify many of these borrowers from purchasing the properties they'd like to buy.  They can qualify for credit, just having issues the amount they will qualify; which normally puts them out of range for purchasing a home.  However, you are starting to find a higher amount of these types of borrowers moving to locations that is more affordable for them.

Dec 28, 2016 10:16 AM #1
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