Can a student loan affect my credit

Do Student Loans Affect Credit Score?

A student loan can be a valuable tool in helping someone reach their education and career goals. Access to financing is crucial when it comes to being able to enroll in a program — after all, even a relatively inexpensive education can still cost thousands of dollars. But in addition to impacting your finances and your education, do student loans affect credit score too? Here, we’ll take a look at how student loans and your credit relate to each other.

Impact of a credit report pull

When it comes to federal loans, the good news is that (with the exception of Direct PLUS Loans) they don’t require a credit check — because of that, the act of simply applying the loan won’t impact your credit score. For private loans, on the other hand, lenders will often base their approval on the applicant’s credit history, and so will pull their credit report upon application. A hard credit pull can result in a temporary dip in your credit score.

As with other private lenders, at Climb we perform credit pulls in order to evaluate applications. However, we know how important it is to fully understand the terms you’re agreeing to with something as important as educational financing. So, we only perform a soft credit pull upon initial application, which has no impact on credit score. A hard credit pull is only performed once a loan is funded, so people can take out an application just to check their rates or reapply with a co-borrower with no effect on their credit score.*

Impact of on-time payments

The relationship between student loans and credit doesn’t begin and end with the application, though. This is why it’s important to continuously make on-time payments. In doing so, you’ll build a history of on-time payments, increase the average age of accounts on your credit, and boost your credit mix — all of these could help build up your credit.

Impact of late payments

While on-time payments can positively affect your credit, a series of late payments can do the opposite. Once a loan has been late for a certain number of days, the servicer will report it to the credit bureaus. This will negatively impact your credit, and it can stay on your credit report for years. Left unpaid, this will eventually result in your loan going into default, which comes with myriad consequences, including loan acceleration; loss of eligibility for additional loans, deferment, or forbearance; wage garnishment; and more.

Found the answer to "do student loans affect credit score," but want more tips and assistance with student loan applications and repayment?

Do Student Loans Affect Credit Score

*Climb performs a “soft” credit pull to evaluate eligibility, but this soft credit check will not affect your credit score. A hard credit pull is only performed once the loan is accepted and funded.

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What to Expect: Realistic Outcomes

Climb’s Comprehensive Access Solution can offer a strategic balance of increased enrollments and upfront cashflows compared to traditional lenders. While no financing solution guarantees 100% collection, our data-driven approach maximizes both upfront cash and long-term repayment rates.

Typical Partner Results:

  • 15-30% of students qualify for Climb Loans with upfront tuition delivered to the school shortly after course start
  • 45-60% of students qualify for 0% APR* payment plans
  • Enrollment increases of 20%+ reported by partner schools**

**Results vary by school and student demographics. This represents performance reported by individual school partners and should not be considered a guarantee of your specific outcomes.

The bottom line: CAS is designed to maximize your net tuition recovery while eliminating the administrative headaches of student financing.

Maximizing Your Results

Pro Tip: Schools that require student deposits and set up automatic payments during enrollment see significantly better repayment performance across all financing options. These simple steps can meaningfully improve your outcomes.

FAQs

We use a comprehensive, AI-driven assessment that goes beyond traditional FICO scores to better serve career training students:

  • Climb Credit Score: Over 150 data points specifically designed for vocational students
  • Debt-to-Income Ratio: Reliable predictor of payment performance
  • FICO Score: Used primarily for interest rate assignment

Key advantages of our approach:

  • Soft credit pull until loan funding (no credit impact during application)
  • The majority of students receive instant decisions
  • Students can apply with co-borrowers directly in the application
  • More accurate placement into appropriate financing products

We use a comprehensive, AI-driven assessment that goes beyond traditional FICO scores to better serve career training students:

  • Climb Credit Score: Over 150 data points specifically designed for vocational students
  • Debt-to-Income Ratio: Reliable predictor of payment performance
  • FICO Score: Used primarily for interest rate assignment

Key advantages of our approach:

  • Soft credit pull until loan funding (no credit impact during application)
  • The majority of students receive instant decisions
  • Students can apply with co-borrowers directly in the application
  • More accurate placement into appropriate financing products

Students are placed into funding brackets (Elite, Standard, Enhanced) based on our AI assessment. Higher-credit students generate higher upfront payments to your school, while students with limited credit are seamlessly directed to our 0% Payment Plan.

These brackets are established using data from over $1 billion in career training loan originations and may be adjusted periodically based on updated repayment trends.

Important note: Regardless of which bracket a student falls into, they are considered fully paid by your school once funded. The student’s repayment obligation exists exclusively between Climb and the student.

Elite Access not available for Computer Science programs. Upfront percentages vary by industry and loan terms.

Once Climb disburses upfront funding for a student loan, that student is considered fully paid by your school. You will not receive any additional payments for that student—the single upfront payment is complete and final.

From that point forward, the student’s repayment obligation exists exclusively between Climb and the student. Your school has zero liability if the student defaults, and you keep the full upfront payment regardless of the student’s future payment performance.

They’re automatically offered our 0% Interest Payment Plan, ensuring no student is turned away while maintaining steady monthly cash flow for your school.

Higher-credit students generate larger upfront payments (75-100% of tuition), while students with limited credit use our 0% APR* Payment Plan for consistent monthly revenue. Both options are risk-free for your school

Absolutely. Climb complements existing payment options like scholarships, employer-sponsored programs, and internal financing.

Absolutely. Climb complements existing payment options like scholarships, employer-sponsored programs, and internal financing.

Typically, within 5-10 business days after your partnership agreement is signed.

Comprehensive onboarding webinar, continuous partner support via AI-assisted chat and live email—and real-time borrower assistance with our live-chat-available student success team.

No. Climb fully manages the administrative responsibilities—your team simply monitors your school’s performance via our intuitive School Portal.

Your school is fully protected either way. For Climb Loans, you keep the entire upfront payment with zero liability. For Payment Plans, you only receive what students actually pay, with no risk to your school.