Blog
This blog is available in English or Spanish:

Student Loans = Higher Credit Scores

Agents, did you know you can share a personalized version of this post? Learn more!

Student Loans = Higher Credit Scores | Keeping Current Matters

According to a recent analysis by CoreLogic, 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

Millennials are on pace to become the most educated generation in our nation’s history, 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.”


Members: Sign in now to set up your Personalized Posts & start sharing today!

Not a Member Yet? Click Here to learn more about KCM's newest feature, Personalized Posts.

Have You Set Up Personalized Posts Yet? | Keeping Current Matters
Share

About The KCM Crew

We at The KCM Crew believe every family should feel confident when buying & selling a home. KCM helps real estate professionals reach these families & enables the agent to simply & effectively explain a complex housing market. Take a 14-Day Free Trial of our monthly membership to see how we can help you!

2 Responses to “Student Loans = Higher Credit Scores”

  1. Doug Fischer December 21, 2016 at 2:53 pm # Reply

    I’m guessing this analysis is skewed because it could be that a parent is actually making the payment on the student’s loan. And it stands to reason that the larger the debt, the more likely it is that parents are helping.

  2. Doug Fischer December 22, 2016 at 4:42 pm # Reply

    And a young adult doesn’t have a long credit history, so a student making regular payments on time is going to have a better score than someone with little use of credit.

Leave a Reply