Does Student Loan Default Hurt Your Credit?

Student loan default isn't only a repayment issue. It can also have consequences for your credit history.

For borrowers already struggling financially, that can make an unresolved default even more concerning.

Delinquency Can Come First

Credit consequences can begin before a loan reaches default.

Late payments may be reported according to applicable federal student loan and credit reporting rules.

If the situation progresses into default, the default itself can also appear in the borrower's credit history.

What Happens After Rehabilitation?

Student loan rehabilitation has a unique credit-related feature.

After successful rehabilitation of an eligible federal loan, the record of the default itself is generally removed from the borrower's credit history.

However, previously reported late payments may remain.

This is one reason borrowers comparing rehabilitation and consolidation may want to consider more than just how quickly each option can resolve default.

Credit Is Only Part of the Picture

Default can also affect access to federal repayment benefits and potentially lead to collection activity.

Smart Loan Aid helps borrowers evaluate default resolution with the larger student loan picture in mind.

Dealing With Defaulted Student Loans?

Contact Smart Loan Aid to understand potential resolution options and what they may mean for your federal loans.