How Student Loans Can Positively Impact Your Credit History

graduation cap on stack of coins

Approximately 70 percent of Americans who graduate from college have student loan debt. According to, the average graduate leaves school with around $30,000 of debt, totaling roughly 45 million Americans who owe a combined $1.6 trillion in student loans. With student loans being such a major contributor to many people’s debt, it’s important to know how it can positively affect your credit history.

How can student loans help your credit history?

While many may shudder at the thought of acquiring student loan debt, managing your loans responsibly can help you build a positive payment and credit history.

Since your payment history is the most heavily weighted factor of your FICO credit score, paying your student loan bill on-time every month is a great way to build a positive credit history. Your credit history is a record of how long you’ve been using credit, so making payments on your student loans during school or after graduating shows lenders and finance companies that you have experience using credit. A longer, positive credit history increases your chances of getting approved for other financing, such as a mortgage or financing to purchase a car.

Moral of the story

Although student loans may not be fun to pay, managing them responsibly by paying on time is a great way to build positive credit history, which builds creditworthiness with lenders and finance companies.

Are you a college student or recent graduate with limited credit history? Do you need help getting approved for financing to purchase a vehicle? Simply fill out the form on our website and we’ll connect you with a local car dealership that can help you start your credit approval today!