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Student Loan debt will not damage your credit score

Published by admin on January 7, 2010

Student Loan debt will not damage your credit score

Whenever applying for a loan, such as credit card or loan, the lender will require seeing your credit history from a reference agency. Information that keeps them so detailed that it’s really not necessary for us to complete the application form as long as the fraction of a second sees everything you need to know from Experian, Equifax or Call credit, the three main rating agencies references. Would you be very surprised how much they know about you?

Banks, building societies and other financial institutions to provide loans were sending information about your financial transactions to the credit agencies. Every time you apply for a credit card, whenever you miss a mortgage – it gets noted. Know whether you pay the minimum balance each month, or even know your credit limit on each credit card. They also look at public records, voters’ roll and the public register of court actions because that is where are listed all the District Court. This all happens automatically, even if your credit history is required, the computer will provide a statistical analysis of your financial habits and provide an assessment of your suitability. This allows the industry argues lenders make accurate Joined on whether they should borrow money or not.

But there is one piece of financial information that credit agencies are not allowed access, and that’s student loans. Through the industry’s remonstrations the government nothing has changed and they are allowed access to information. What is the reason? Student loans constitute a debt to the taxpayers, not funded business.

Before the September 1998 student loan system worked as follows: once graduates were working and earning the national average, which was 15,000 pounds at the time, had to repay their loans monthly direct debit. 59,000 of these pre-1998 graduates still begun to repay their loans, and each has an average debt of £ 2750.

In September 1998, student loan system changed, and the system remains the same today. Now payments are taken directly at source, directly from salary as well as national insurance and income tax. This method was much more successful.

Lending industry is not happy student loan situation, their main argument is that they need to know when assessing the loan application if the applicant has no further financial responsibility. The introduction of top-up fees resulted in increasingly large amounts of student debt, and the post-1998 loans must be repaid at 9% of graduate’s revenue time when 15,000 pounds, it is a big part of the revenue lost.

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