Depending on the type of student loan you’re looking for, you may need to consider your credit score when applying. Your credit score is more important for private student loans and could be a key factor that determines whether you get approved.

Understanding how your credit score could impact your student loan is especially important if you are looking at a few different loan types. On the flip side, if you don’t have any credit right now, you still have some options. 

Here’s what you need to know about your next student loan and what type of credit score you’ll need to qualify. 

Why Do Student Loans Rely on Credit?

When you take out a student loan, you’re borrowing money for college that you’ll pay back at a future date. Like any loan, there are fees, interest rates and specific terms attached. Lenders may want to check your credit to confirm that you’re a trustworthy borrower who can pay back the loan when it’s time. 

A good credit score will indicate that you pay your debts on time and that the bank or lender can trust you to do the same with your student loan. Bad credit or no credit could make you seem riskier to lend money to. However, not all student loans require you to have credit to be considered. 

Do I Need Good Credit for a Federal Student Loan?

You don’t need a credit score to qualify for most federal student loans, including Direct Subsidized Loans and Direct Unsubsidized Loans. That makes federal student loans an excellent option for college students who are just getting their credit established and don’t have any history. 

Instead, you’ll need to meet other eligibility criteria, including being a U.S. citizen, enrolling in an eligible degree program and filling out your Free Application for Federal Student Aid (FAFSA). 

To obtain a federal student loan, you’ll need to fill out the FAFSA online to determine your options. You could qualify for federal aid such as grants, scholarships and work-study programs. In addition, you’ll be able to see how much federal student loan money you can borrow. 

If you’re taking out a federal Direct Plus Loan, however, you’ll have to undergo a credit check. You don’t need a specific credit score to qualify for a PLUS Loan, but you can’t have an adverse credit history.

While most federal student loans don’t require a credit score, the loan payments will go on your credit as you pay them back. If you fail to make payments or arrange student loan deferment, your loans could go into default, which could hurt your credit score in the future.

Credit Score Requirements for a Private Loan

To qualify for a private student loan, you will need a good credit score or a co-signer. Private loans are backed by nongovernment financial institutions and have their own terms and requirements. While each lender has its own credit score guidelines, most will want you to have a credit score of at least 670 to qualify. 

The FICO credit scoring model is most commonly used and ranges from 350 to 850. According to Equifax, a good FICO score ranges from 670 to 739, while a score from 740 to 799 is considered excellent. The better your credit score, the more likely it is you’ll qualify for a private student loan with a low interest rate and low fees. 

Some private lenders may be more lenient with credit score requirements or may not check your credit at all in rare cases. In these situations, they will pay close attention to other factors such as your income or future earning potential. Unfortunately, the interest rates on these loans will be higher than both federal student loans and private student loans that require a credit check.

Should You Get a Co-Signer?

If you need a private student loan that requires a credit check and you don’t have any credit, you may want to consider getting a co-signer. A co-signer is someone who applies for the student loan with you and agrees to repay the balance if you are unable to. 

A co-signer can be a parent, relative or friend who has a good enough credit score to qualify for a private student loan. Since the co-signer will also be legally responsible for repaying the loan, any late or missed payments will affect both your credit and theirs. 

Some lenders offer to release the co-signer from the loan once the student borrower is able to make a certain number of on-time payments and obtains a better credit score in the future.

What Credit Score Is Required to Refinance Student Loans?

Even if you already have student loans, refinancing them will require a credit check in most cases. Refinancing your student loans can help you save money on interest and potentially even pay off your debt faster. 

Refinancing your loans involves applying for a new loan with a new, hopefully lower, interest rate. You will need to meet the lender’s minimum credit score requirement, which usually ranges from 650 to 680. 

Keep in mind that the better your credit score, the lower your interest rate could be and the more you’ll save. The lender will also look at your other debt and compare it to your income. If your credit is on the mend, you can ask a co-signer to go on the loan with you to refinance your student debt. 

Find the Right Student Loan for You

In any case, your credit score can play a major role in whether you’re able to obtain the best student loan for your situation. If you don’t have any credit, you can always start with federal student loans. It often makes sense to exhaust your federal student loan options first anyway, as they offer benefits and protections for borrowers that aren’t available with private student loans. 

If you have to borrow more than the federal limit and need a private student loan, you can use Juno to shop around for the best options for both undergraduate student loans and graduate student loans. Some loans may require co-signers, but the rates are competitive, and because Juno negotiates on behalf of borrowers, you’re bound to find the best option regardless of your current credit score.