How to take out student loans without getting your parents to co-sign
This is a serious question that needs to be addressed and FAST. Mom and Dad don’t want to co-sign or the simply cannot. Uncle Bob is skeptical and nobody else wants to jeopardize the next 15 years of their credit profile so you can go to school. You probably have been told that you need to get SOMEONE to co-sign for your student loans right? Since you’re already enrolled in school and cannot pay cash let’s take a look at your best options.
This article will give you 5 easy action steps you can take TODAY so that you can fix this little dilemma you’re facing. In fact- I actually use these same exact legal and legitimate hacks with many of my clients that are applying for mortgage financing. In less than 30 days I've taken many clients from literally having no credit score at all and now he’s at a 750 so these techniques are proven to work.
I've shown a ton of my clients how to use these techniques and today is your lucky day. It’s your turn to learn how to do this so you can go study for 4 years and change your life with an education.
How good does your credit need to be to get a student loan without a co-signer?
Chances are if you are reading this article, you probably know how student loans work. I would even be willing to bet that the reason you're even still reading is because you’re so desperate OR somebody recently asked you to become a cosigner on their student loan. So let’s dive in a little deeper.
Most lenders wont jump out and advertise this but most look for a score in the mid 600 range or higher. Well isn’t that a darn shame... Nearly 80% of all college students attending four-year public and private schools are age 18-24 according to a recent age distribution study.
It’s no shocker that this SAME demographic has an average FICO of less than 640 according to NGPF and many folks at the age of 18 having no credit score at all. This is why About 90 percent of private student loans are borrowed with the help of a cosigner. If you don't believe me then just see what the Consumer Financial Protection Bureau (CFPB) report says.
What’s the difference between Federal and Private student loans?
Quite simply- Federal direct undergraduate loans do not require a co-signer but the funds are limited. Most of the time they do not cover all of your tuition expenses but it’s a good start. Chances are you’ve already tapped out this option. If you haven’t then you should apply for all of those right away and get your FAFSA on.
As you start to study and you discover student loans are not all created equal- you will likely find yourself searching for private student loan option. There are thousands of private student loan lenders. Since you’ve already exhausted your federal student loan options with FAFSA and you hit a brick wall there it’s time to move on. You don't even need a credit score to get a Federal student loan so every student starts here. If you do what everybody else is already doing in life then you're destined for average or mediocre results at best so what do we do Mike? Well sit tight because I've got just the solution for you.
What is loan underwriting and why should I care?
Anybody that applies for a loan of any kind is subject to a human or automated system underwriter review. Underwriting takes a look at your overall risk factors and strengths to determine loan approval or denial. Knowing what you need to satisfy upfront will allow you to make sure you’re strong in those areas…here’s what they will look at: Credit report and FICO scores, income, current debt and overall ability to repay the loan and not default.
Now you’re ready for these 5 easy techniques so you can get a student loan without a co-signer
1. The authorized user hack
This is by far the most important part of this whole article so pay attention here. Remember how uncle Bob didn’t want to be on the hook for the next 15 years of repaying those loans? Sure he wants to help you out somehow someway but let’s be real- who really wants to be on the hook for those payments every single month…nobody wants that burden except maybe Jesus. Give Bob a call and give him a good scare and straight up ask him to co-sign and see how terrified he gets before he throws you every excuse in the book. THEN tell him you’re just kidding and you knew he wouldn’t co-sign anyways and have a good laugh about it.
Then ask him for real: OK well I’ve got a better idea anyways- can you please add me on to your oldest credit card with a $0 balance as an authorized user? Credit Karma gives you all the details but how it works is that Bob will call the credit card company and request that you be added onto that card as an ‘authorized user’ and they will send a card to his address with your name on it.
Then don’t activate it- just cut it up and throw it out. The entire payment history and credit limit will all report to your credit report in as little as 7-14 days but plan for about 45. The downfall to this is that technically you can request a card to be sent to you and you will have access to manage this account technically- but don’t mess with uncle Bob’s life just go to school and do the right thing kiddo. I’ve seen tons of people go from ‘not scorable’ to 750+ credit scores in a matter of weeks just by doing this 1 thing.
2. The Experian Boost hack
Raise your scores instantly for free with Experian Boost by signing up and linking up your bank accounts. They will report some of your bills that you pay to your credit report (EXP only) and this will add depth and age to your overall profile and show that you are capable of making on-time payments. “Results may vary. Some may not see improved scores or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian BoostTM”
3. Sign up for the UltraFICO
This concept is pretty similar to the Experian Boost and it reports positive bank account history to your credit report. While mortgage lenders don’t consider this sufficient- other lenders DO take this into consideration so don’t pass up this opportunity to bolster up your credit report in every way possible. Ultrafico states that : 7 out of 10 people in the U.S. who have had consistent cash on hand in recent months and kept positive balances on their accounts, could see an UltraFICO™ Score that is higher than their traditional FICO® Score.
4. Get your rent payments reporting to your credit report
This is only applicable for certain folks so definitely read up on what they will allow at https://rentalkharma.com/ but they will report up to 2 years worth of rent payments to Trans Union only. If you don’t quite qualify for that then head on over to https://www.rentreporters.com/ and see if you can achieve their average of a 40+ point FICO score boost on both Equifax and TransUnion.
5. Sign up for free credit monitoring with Credit Karma
Check your scores weekly and watch them increase as all these new hacks are completed.
Opt OUT of unwanted solicitations by going to https://www.optoutprescreen.com/ which the CFPB recommends on their website. You’re going from ZERO to HERO overnight with a higher credit score so I promise you that every creditor under the sun is going to send you all kinds of junk mail and credit card offers and predatory personal loans and checks for $30,000. Beware because they are almost all scams and horrible predatory loans and they will hurt you in the long run most likely. Just do what I’m telling you and you will be fine.
All you need to do is hack (by legit means) some good stuff onto your credit report ASAP and then you will have a respectable credit score right away. Nobody comes out of the womb with an 818 FICO score OR gets there by accident- attaining that perfect FICO score takes years of hard work.
Doing these 5 steps can get you close really fast because we’re just making sure you’ve got a complete credit profile so the underwriters feel good about issuing you a student loan approval instead of another denial letter. According to www.Myfico.com: “FICO® Scores are calculated using many different pieces of credit data in your credit report. This data is grouped into five categories: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%) and credit mix (10%)”
The authorized user hack, rent reporting technique and Experian Boost will help you meet all of those criteria right away. If you cannot do all 3 for whatever reason though- the authorized user one should be good enough to skyrocket your score overnight so call up uncle bob and let him set you up with a 1 way ticket straight to the promised land and (hopefully) a 700+ FICO score that will save you hundreds of thousands of dollars in your lifetime.