Credit Scores And Private Student Loans

Q: I have found out that I do not qualify for a private student loans without a cosigner. My problem is, I have not received enough from FAFSA and federal student loans to cover the costs of my college expenses, so a private student loan seems like the next logical step to me. However, I can not find a cosigner, what can i do to repair my credit so that I could qualify for a private student loan without the help of a cosigner, or do I have any other options?

A: Here some strategies for repairing/establishing your credit, however understand that repairing/establishing your credit takes time, and chances are you will not be able to qualify for a private student loan without a cosigner anytime soon. You may want to take a look into scholarships, grants, other loan alternatives, and/or consider some other possible strategies for cutting/supplementing your college costs (such as community college, part-time/full-time work, etc…) if you can not find a creditworthy cosigner for a private student loan.

Strategies for Repairing/Establishing Your Credit

1. Make sure all of your payments are made on or before the due date, because the first time that you are late on a payment it will show up on your credit report.

2. Establish a long term account with a reputable credit company (if you are suffering from lack of credit history). Proving that you are a reliable borrower, helps your credit score.

3. Many are unaware that closing a credit card account, could make your credit history appear much shorter and could end up harming your score. It is important to pay off/down your credit cards, but think carefully before closing or canceling a credit card.

4. Never take on more debt than you can handle. Credit card debt should not exceed more than 20% of your income.

5. Be leery of credit repair scams. Generally the only ways to improve your credit are good payment habits and limiting your borrowing.