Repaying your Loan
When it's time to repay your loan, making your payments regularly and on-time will help you establish a good credit rating and polish your money management skills.
If changes in your situation cause you to have difficulties maintaining your current repayment schedule, you may want to explore other options No one likes to think about it, but sometimes the worst-case scenario comes true. You lose your job. You're in an accident. You incur large medical bills. If for any reason you can't make your payments, notify the lender or servicer of your loan right away. You may be eligible for a loan deferment or forbearance. Whatever you do, don't risk defaulting on your loan.
Benefits of Good Credit
Communicate with creditors up-front, when you are applying for the credit. Don't be shy about negotiating, especially if you have a good credit history. For example, if you think you're a desirable customer, ask your credit card company to give you a better rate or to waive the annual fee. It's always good to ask.
Communicate If There are Problems
The most important time to communicate with your lenders is when you're not able to keep up with your payments. While most creditors really won't care about the reason why you're having difficulty, they do care about getting the debts repaid. Most creditors will work with you to develop a new payment schedule until your situation improves.. Avoiding your creditors will only make things worse.
TIP: Be sure to contact your lender if you move; that's one of the most common errors borrowers make. Remember, it's your responsibility to keep your lender informed of important changes to your contact information, your marital status, your school attendance, and so on.
Get Help from the Government
The U.S. Department of Education works with student loan borrowers for informal resolution of loan disputes and problems. If you have a dispute with a lender, servicer or guarantor and are having trouble resolving it, contact the Ombudsman Customer Service line at 877.557.2575. Or, write to:
Student Assistance
U.S. Department of Education
Room 3012, ROB #3
Seventh and D Streets, Southwest
Washington, DC 20202-5144
Stay on Top of Your Credit Rating
It's important to have a good credit record. Your credit rating reflects payment consistency as well as whether you've made your payments on time. Several companies track your payment record, and then sell that information to other companies that have a vested interest in knowing how responsible you've been - or not been - in paying your bills.
Who would have an interest in your payment record? Other creditors, such as credit card and car lease companies and landlords. Even potential employers may have an interest in your credit history.
Here are some problems that could arise if your credit history is not in order:
- If your credit report shows you haven't been making your payments on time or you've been missing payments, a creditor could consider you too high a risk and may reject your application.
- Some employers, with your approval, use credit reports to help evaluate your character when you're applying for a job. They reason that if you're not reliable enough to pay your debts, you probably aren't the person they want to work for them.
Occasionally, incorrect information may get included in your credit report. Especially because of increasing problems with identify fraud, you may want to request a copy of your credit report annually, you can identify any errors before they cause a problem. A copy of your credit report will cost you about $8. And you can obtain it free of charge if, within the past 60 days:
- You were denied credit or Social Security benefits
- You're unemployed or a welfare recipient
- You were denied employment, credit, rental housing or insurance
- You're victim of fraud
You can also request a copy of your credit rating for an additional fee.
