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If you’re trying to build your credit, it may take a while. Pulling out of debt can be hard, especially when unexpected bills or job loss hits. And negative marks can stay on your credit report for seven or even 10 years.

This can be a challenging situation, but knowing what can positively impact your score can help you navigate this situation. Read on to learn more about what it takes to manage debt responsibly and help build your score.

Factors that Can Influence Your Credit Score & Report

A credit score gives a numerical value to a person’s credit history. It can help give lenders a big-picture look at a potential borrower’s creditworthiness. These scores (there isn’t just one) provide lenders with insight into how reliable a person might be when it comes to repaying their debt.

This can influence a lender’s decision on whether or not to loan a person money, how much money they are willing to lend, and the rates and terms for which a borrower qualifies.

Since credit scores are so widely used, it’s easy to see why some individuals may be interested in improving their credit scores. First, it might be helpful to understand the factors used to actually determine your score. Here’s a snapshot of what goes into a FICO® Score, since that is the credit score used by many lenders right now.

•   Your payment history accounts for approximately 35% of your FICO Score, making it one of the most influential factors. Even just one missed or late payment could potentially lower a person’s credit score.

•   Credit utilization ratio accounts for 30% of your score. Credit utilization ratio is your total revolving debt in comparison to your total available revolving credit limit. A low credit utilization ratio can indicate to lenders that you are effectively managing your credit. Typically, lenders like to see a credit utilization ratio that is less than 30%.

•   The length of your credit history counts for 15%, and that may be a good reason not to close an account that you use infrequently. It might help add to the length of your history.

•   Your credit mix accounts for 10% of your score. While not a good reason to go out and open a new line of credit, the bureaus do tend to prefer to see a mix of accounts vs. just one kind of credit.

•   The last component, also at 10%, is new credit, meaning are you currently making a lot of requests for credit. The number of hard credit inquiries in your name could make it look as if you are at risk of financial instability and are seeking ways to pay for goods and services.

Credit Issues: How Long Do They Linger?

Negative factors like late payments and foreclosures can hang around on your credit report for a while. Generally, the information is included for around seven years.

Bankruptcy is an exception to this seven year guideline—it can linger on your credit report for up to 10 years, depending on the type of bankruptcy filed. Bankruptcies filed under Chapter 7 can be reported for up to 10 years from the filing date. Bankruptcies filed under Chapter 13 can be reported for seven.

While a late payment will be listed on a credit report for seven years, as time passes it typically has less of an impact. So if you missed a payment last month, it will have more of an effect on your score than if you missed a payment four years ago.

These numbers are important to know when you are working to build your credit.

How Long Does It Take for Your Credit Score to Go Up?

Here’s a look, in chart form, at how long it takes for different negative factors to drop off your credit report.

Disputing an Error on Your Credit Report

Checking your credit report can help you stay on top of your credit. You’ll also be able to make sure the information is correct, and if needed, dispute any mistakes. There could, for instance, be a bill you paid long ago on your report as unpaid, or perhaps account details belonging to someone else with a similar name erroneously wound up on your report.

There are three major credit bureaus — Equifax®, Experian®, and TransUnion®. You can request a copy of your credit report from each of the three credit bureaus at no cost. You can visit AnnualCreditReport.com to learn more. Checking in with each report may feel a little repetitive, but it’s possible that the credit bureaus could have slightly different information on file.

If you find that there are discrepancies or errors, you can dispute the mistake. You’ll have to write to each credit bureau individually. Generally, you’ll need to send in documentation to support your claim. Once you’ve submitted your dispute letter, the bureaus typically have 30 days to respond.

It’s possible that a bureau will require additional supporting documentation, which can lead to some back and forth within or sometimes after the 30 days. It could take anywhere from three to six months to resolve a credit dispute, though some of these situations will take more or less time depending on complexity.

Staying on Top of Efforts to Build Credit

Sometimes, resolving issues on a credit report isn’t enough to build a bad credit score. On the bright side, credit scores aren’t permanent. Here are a few ideas for helping you to build your credit.

Improve Account Management

If you’re struggling to keep up with accounts with a variety of financial institutions, it could be time to simplify. Take stock of your investments, debts, credit cards, and savings or checking accounts. Is there any opportunity to consolidate?

Having your accounts in one, easy-to-check location can make it simpler to ensure you never miss an alert or important deadline. Automating your finances and using your bank’s app to regularly check in with your accounts (say, a few times a week can be a good cadence) can make good money sense as well, helping you keep on top of payment deadlines and when your balance might be getting low.

Make Payments On-Time

Did you know that your payment history (as in, do you pay on time) is the single largest factor in determining your credit score? Lenders can be hesitant to lend money to people with a history of late payments. So make sure you’re aware of each bill’s due date and make your payments on time. One idea? As mentioned above, you could set up autopay so you don’t even have to think about it.

Limit Credit Utilization Ratio

It could help to set a realistic budget that leads to a fair credit utilization ratio, meaning that your credit balances aren’t too high in relation to your credit limit. Some accounts will let you set up balance alerts that can warn you as you inch closer to the 30% guideline of the maximum you want to reach. Another option could be paying your credit card bill more frequently (for example, setting up a mid-cycle payment in addition to your regular payment).

Strategize to Destroy Debt

When it comes to paying off debt, having a plan can help. For example, using a credit card can be an effective way to build your credit history, but if not used responsibly, credit card debt can be incredibly difficult to pay off.

Not only that, it could end up impacting your credit score (say, if your credit utilization ratio creeps up above 30%, as noted above). As a part of your plan to build your credit after negative factors have occurred, you might consider putting a debt repayment plan into place.

Your finances and personal situation will be a major factor in the debt payoff plan that works best for you. If you need some inspiration, the methods below may be helpful to reference in your quest to pay off debt. If you decide that one of these options works for you, here’s how you might go about them.

The Snowball

The snowball method of paying off debt is pretty straightforward.

•   To put it into action, you would organize your debts from smallest to largest, without factoring in the interest rates.

•   Then you’d continue to make the minimum payments on all of your debts while paying as much as possible on your smallest debt.

•   When the smallest debt is paid off, you’d then roll that money into debt payments for the next smallest debt — until all of your debt is repaid.

This strategy is all about changing behavior and building in incentives to help keep you going. Starting with the smallest debt means you’d see the reward of paying it off faster than if you had started with the larger debt. While this method can help keep you motivated and laser-focused on eliminating your debt, it isn’t always the most cost effective, since it doesn’t take into account interest rates.

The Avalanche

The debt avalanche method encourages you to focus on your highest-interest debts first.

•   Prioritize debts with the highest interest rates by putting any extra cash towards them.

•   Continue to make the minimum payments on all of your other debts.

This technique could help save money in interest in the long run. And it could even help you pay off your debts sooner than the snowball method.

The Fireball

The fireball method combines the snowball and avalanche methods in a hybrid approach designed to help you blaze through costly debt so you can focus on the things that matter most to you.

•   The first step in this method is to go through all of your debts and categorize them as either “good” or “bad.”

•   “Good” debts are those that tend to contribute to your financial growth and net worth; they also tend to have relatively lower interest rates. Good debt might be a student loan that helps you launch your career or a mortgage that allows you to own a home.

•   Debts with high interest rates that don’t go towards building wealth (such as credit card debt) are often considered “bad.” With this method, you can list your “bad” debts from the smallest amount to the largest amount.

•   Then you’d take a look at your budget and see how much money you have to funnel toward making extra debt payments. While making the minimum monthly payment on all outstanding debts, you’d direct the extra funds toward the bad debt with the smallest amount due.

•   When that smallest balance is repaid in full, you’d apply the total amount you were paying on that debt to the next smallest debt. Then you’d continue this pattern, moving through each outstanding bad debt until they are all paid in full.

An important note: While you are moving through your higher-interest debts, you would still follow the normal payment schedule on your lower-interest debts.

By focusing on the debts with the highest interest rates first, this method could save you some change when compared with the snowball method. And, since you’re then targeting bad debt from the smallest balance to the largest, you could still benefit from the same psychological boost as you see your debt shrink, one payment at a time.

Create a Goals-Based Approach

Having financial goals could possibly help you streamline your efforts. If you’re actively working toward saving for, say, a down payment, you may feel less inclined to spend money elsewhere.

You could try setting short-term, mid-term, and long-term goals. In the short-term your goals might be as simple as tracking your spending and setting up a budget. Or perhaps saving for a big vacation that’s a year or so away. For mid-term goals, you might think about something a little further out, like buying a house or saving for a child’s education. Long-term goals are often things like (you guessed it) saving for retirement.

Writing down your goals and setting a time for when you’d like to reach them can help you set up your plan.

Consolidate Your Debt

If you are working on building your credit and want to pay down your credit card balances, one option could be a personal loan to consolidate that high-interest debt.

A debt consolidation loan can offer a couple of benefits. For instance, it can simplify paying your debts since you can combine multiple debts into one simple payment. This can be easier to pay on time than multiple bills with different due dates.

Also, a personal loan may offer a more favorable interest rate and terms than credit cards, potentially allowing you to pay less and get out of debt sooner.

The Takeaway

It can take a few months to several years (a decade even) to repair credit. Much will depend on your particular situation and what damaged your credit and by how much. By managing debt responsibly, you can build your score. Different debt payoff methods or a debt consolidation loan are among the options to help positively impact your score.

FAQ

How long does it take to build credit from 500 to 700?

There’s no set amount of time that it will take to build a credit score from 500 to 700. It could take a year or two or longer. It will depend on such factors as whether you pay bills on time, avoid taking on new debt, and manage your balances well, among others

How long does it take to repair your credit score?

Repairing a credit score can take a few months to several years, depending on your particular scenario. You might see small improvements in as little as a couple of months if you pay off credit card debt, or it can take years to recover from, say, a bankruptcy.

Will my credit score go up if I pay off all my debt?

Typically, your credit score will go up if you pay off all your debt. Among the positive impacts are lowering your debt-to-income (DTI) ratio.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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A personal loan can be a useful tool for consolidating debt, funding home repairs, or covering unexpected expenses. Taking out a personal loan can also help you build credit over time, provided you use it responsibly. Like any credit product, a personal loan has the potential to either strengthen or weaken your credit profile, depending on how you manage it.

Understanding how personal loans interact with the components of your credit score can help you make smarter borrowing decisions. Let’s explore when a personal loan contributes positively to your credit — and when it doesn’t.

When Does a Personal Loan Help You Build Credit?

Taking out a personal loan can help you build credit under the right circumstances. Here’s how it can positively impact various aspects of your credit profile.

Your Payment History

Payment history is typically the most significant factor in your credit scores, accounting for approximately 35% of your FICO® Score. When you make on-time monthly payments on your personal loan, you’re showing lenders that you’re reliable and responsible.

Each successful payment helps build a positive payment history. Over time, this consistency can have a favorable impact on your credit file, especially if you previously lacked installment loan accounts or had missed payments in your past. A single missed or late payment, on the other hand, can stay on your credit report for up to seven years, so timely payments are crucial.

Your Credit Utilization Ratio

Your credit utilization rate is the percentage of available credit that you’re using on your credit cards and other lines of credit, and is another important factor in your credit scores. While credit utilization typically applies to revolving credit like credit cards, a personal loan can still indirectly improve your utilization ratio. If you use a personal loan to pay off high-interest credit card debt, known as credit card consolidation, your credit card balances will go down, reducing your utilization.

For example, if you owe $4,000 on a card with a $5,000 limit, your utilization is 80%, which is high. But if you use a personal loan to pay off that balance, your credit utilization on that card drops to 0%, which can have a positive impact on your credit file. Keeping your utilization below 30% is generally recommended for maintaining good credit health.

Recommended: Personal Loan Calculator

Your Credit Mix

Your credit mix — meaning the different types of credit you have — accounts for about 10% of your FICO score. Lenders generally like to see that you can manage multiple kinds of credit, such as credit cards (revolving credit) and personal loans (installment credit).

If your credit history includes only revolving accounts, taking out a personal loan can diversify your credit mix, which could positively impact your profile. This diversity shows you’re capable of managing various types of debt responsibly.

Recommended: What Is a Credit-Builder Loan?

When Doesn’t a Personal Loan Help You Build Credit?

While a personal loan can build credit, it’s not a guaranteed outcome. Missteps in how you use or repay the loan can do more harm than good.

Late Payments

As mentioned, late payments can do serious harm to your credit file. If you’re more than 30 days late, lenders may report the delinquency to the credit bureaus. Even a single missed payment can cause your credit score to drop — exactly how much will depend on how late the payment is, your current credit score, and your overall credit history.

Consistently late or missed payments can turn a credit-building opportunity into a long-term financial setback.

Short-Term Loan

Personal loans with very short repayment periods — especially payday loans or high-fee cash advances — typically don’t do anything to positively impact your credit file. In many cases, these loans aren’t reported to the credit bureaus. Even if they are, they may not help you build credit because they don’t show a long-term payment history.

What’s more, frequent borrowing of short-term loans could be a red flag to lenders that you’re struggling to manage your finances.

High Debt-to-Income Ratio

While your debt-to-income (DTI) ratio isn’t part of your credit score, it plays an important role when applying for new credit. DTI ratio is of interest to lenders because it shows what portion of your income is already allocated to debt repayment. If your DTI ratio is relatively high and you add a personal loan, lenders may see you as overextended. This could make it harder to get approved for a mortgage, car loan, or credit card in the future.

Generally, you want to aim for a DTI ratio of 36% or less. This suggests you have a healthy amount of income to afford monthly payments for a new loan or line of credit.

To calculate your current DTI ratio, add up all your monthly debt payments, divide that total by your gross monthly income, and multiply the result by 100. This will give you your DTI ratio as a percentage.

Tips to Maximize the Credit-Building Potential of a Personal Loan

If you’re considering a personal loan as a way to build credit, these strategies can help you use the loan wisely.

Choose a Reasonable Loan Amount

It’s important to only borrow what you can reasonably afford to repay. Before signing the loan agreement, calculate your monthly payments and make sure they fit comfortably within your budget. Stretching your finances to take out a large loan can increase your risk of missing payments — and damage your credit.

Remember, the goal is to build credit, not add financial stress.

Set Up Automatic Payments

To avoid late payments, consider setting up automatic payments through your bank or lender. “Setting up autopay is one way to make sure payments are made regularly and on time,” says Brian Walsh, CFP® and Head of Advice & Planning at SoFi.

Most lenders offer autopay options that draft your monthly payment directly from your checking account on the due date. Some even offer a small interest rate discount for using autopay. This strategy helps ensure you never miss a payment and allows you to establish a consistent payment history.

Monitor Your Credit Reports

Regularly checking your credit reports allows you to track the impact of your personal loan and spot any errors or inaccuracies. You’re entitled to a free credit report every week from each of the three major credit bureaus — Equifax®, Experian®, and TransUnion® — at AnnualCreditReport.com.

As you scan your reports, you’ll want to make sure your loan is being reported accurately and that your on-time payments are being recorded. If you notice any mistakes, dispute them with the appropriate bureau promptly.

The Takeaway

So, can a personal loan build credit? Yes — if managed properly, a personal loan can have a positive impact on your credit profile over time. It can do this by adding positive information to your payment history and diversifying your credit mix. If you use a personal loan to pay down credit cards, it can also reduce your credit utilization, which is also factored into your credit scores.

However, the opposite is also true. Late payments and taking on more debt than you can handle can hurt your credit profile instead of helping it.

Ultimately, a personal loan isn’t a quick fix for bad credit, but it can be a strategic part of your long-term credit-building plan. By borrowing responsibly and staying on top of your debt, you can use a personal loan to work towards a stronger financial future.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

Do personal loans raise credit scores?

If managed responsibly, a personal loan can have a positive impact on your credit file. When you make on-time payments, it adds positive payment history to your credit reports, which is a major factor in your score. In addition, a personal loan can improve your credit mix if you mostly have revolving credit like credit cards. However, if you miss payments or take on too much debt, it could negatively affect your profile and make it harder to qualify for credit with attractive terms in the future.

How long does it take to build credit with a personal loan?

How long it will take to start seeing credit impacts from a personal loan will depend on your current financial situation. At the earliest, adding positive information to your credit reports may be factored into your scores a month or two later. However, it can a few more months for any positive measures to make a noticeable impact. If you already have negative information on your reports, it could take a year or more to turn things around.

Is taking out a personal loan bad for credit?

Taking out a personal loan isn’t inherently bad for your credit. In fact, if you manage it wisely, it could positively impact your credit file over time.

When you first apply for any type of credit, you may experience a small drop in your scores due to the hard credit inquiry. However, this effect is only temporary. Ultimately, repayment behavior has the largest influence over scores. If you take out a personal loan and make regular, on-time payments, it could have a favorable impact your credit profile. Late or missed payments, on the other hand, can have a negative impact.

The key factor is how you manage repayment of the loan.

Which types of personal loans typically help build credit?

Any personal loan that reports to the major credit bureaus — Equifax®, Experian®, and TransUnion® — can help build credit. This includes traditional unsecured personal loans from banks, credit unions, or reputable online lenders.

If you’re starting with little to no credit history, you might look into a credit-builder loan. With this type of personal loan, you don’t receive funds up front. Instead, the lender puts your monthly payments into a savings account. When all payments are made, you can access the account. The lender will report your payment activity to one or multiple credit bureaus, which can help you build a healthy credit history.

How can I avoid hurting my credit with a personal loan?

To avoid damaging your credit with a personal loan, only borrow what you can afford to repay and be sure to pay on time every month (payment history is the biggest factor in your credit scores). Also try to avoid applying for multiple loans and credit cards in a short period of time, as it can lead to several hard inquiries.

When managed responsibly, a personal loan can actually have a positive impact on your credit profile over time.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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Student loans don’t just help you pay for your college education. They also allow you to build a credit history, which can be useful when it comes time to get a mortgage or take out a car loan. The key, though, is to make regular on-time payment – or you may wind up with the sort of credit history that negatively impacts your ability to borrow money in the future.

Here’s a look at how student loans can affect your credit score.

How Is My Credit Score Calculated?

First, it can be helpful to know how your credit score is calculated. There are several types of credit scores, but FICO scores are the most commonly used by top lenders.

Your FICO score is calculated using five categories of data found in your credit reports, which each category weighted differently.

Based on these calculations, there are a few ways you can build good credit and maintain a good credit score. Paying your bills on time is a big one, since your payment history is the most heavily weighted factor. Paying down existing debt and keeping credit card balances low will also have a big effect. Less impactful, but important strategies, also include diversifying the types of credit you have, avoiding opening too many new accounts at once, and keeping accounts open to lengthen the average age of your credit history.

What Student Loan Factors Affect My Credit Score?

Now that you know how credit scores generally work, you might be wondering how your student loans specifically impact your score.

Again, one of the biggest ways your student loans can affect your credit is whether or not you pay them on time. If you’re a responsible borrower who continually makes on-time student loan payments, you will see positive shifts in your credit score over time.

But if you fail to repay a loan or continually make late payments, your credit score will likely see a dip. If you default on your student loan, your credit score could drop significantly. The lender may also send your account to a collections agency, and you may have a more difficult time securing credit in the future.


💡 Quick Tip: Get flexible terms and competitive rates when you refinance your student loan with SoFi.

How Does a Late Student Loan Payment Affect My Credit Score?

Making payments on time is important, but what you might not realize is exactly how damaging late payments can be. Even if your credit history is pristine, it only takes one report of 30 days past due to change your score. Once a late payment is reported to the credit bureaus, it could remain on your credit report for up to seven years.

To help ensure your payments are on time, you might want to set up an automatic payment plan. Most lenders will even give you a small discount on your interest rate for doing so. If you know you can’t make a payment on time, talk to your lender or loan servicer right away. The Department of Education, which is the lender for four types of Direct Loans, and even some private lenders, offer loan deferment or forbearance. These options allow a borrower to temporarily suspend payments, which will minimize the impact on their credit score.

Does It Hurt to Pay Off Student Loans Quickly?

Repaying student loans quickly will always improve your credit score, right? Not necessarily. In fact, you could even see a small, temporary dip in your credit score right after paying off a loan. There are several reasons for this. If student loans are your primary source of open credit, closing those accounts means you’re no longer building payment history. Prematurely paying off a loan can also change your credit mix or credit utilization.

But credit score is just one factor to consider when deciding how quickly to pay off a student loan. You may want to think about how much extra interest you’d pay by leaving the account open. Carrying a high loan balance could also make it harder to qualify for new loans, which is something to keep in mind when it comes time to buy a home or car.

Notorious Big Bad D’s: Delinquent and in Default

Student loans affect credit scores in a variety of ways, but the worst thing you can do is ignore your monthly loan payment. If you’re even one day late with a payment, you’ll be considered delinquent and may be charged a penalty.

Once a missed payment is more than 90 days delinquent, your loan servicer will report it to the three major national credit bureaus. This could lower your credit score and hurt your ability to get a new credit card or qualify for a car loan or mortgage.

After 270 days of a missed student loan payment, your status changes to default and your student loans are due in full along with any accrued interest, fines, and penalties.

(Note that the on-ramp that’s in place for federal student loan repayment from October 2024 through September 2025 temporarily shields borrowers from the most immediate consequences of delinquency and default.)

Will Rate Shopping Different Student Loan Lenders Hurt My Credit?

When you’re shopping around for the best interest rate possible on a private student loan, lenders may pull your credit file. This is called a hard inquiry, and each one could temporarily knock a few points off your credit score.

To help protect your FICO score, try to finish shopping for rates and finalizing your loan within 30 days. Researching rates and getting quotes ahead of time can give you a good idea of whether you’ll qualify for a loan before you formally apply.

You may also want to ask lenders if they can tell you the interest rate you would receive without doing a “hard” credit pull, which might affect your score. You can’t get a loan without an eventual hard inquiry, but getting prequalified allows you to compare interest rates without impacting your credit score.

Will Refinancing Student Loans Help My Credit?

Because refinancing involves taking out a new loan with new terms to pay off existing debt, refinancing student loans affects your credit score—both positively and negatively.

In the short-term, refinancing will involve a hard credit inquiry and may cause a temporary ding to your credit. Again, as long as you keep your loan shopping to a short period, multiple inquiries will be treated as one, and should have a minimal impact on your score.

In the long-run, refinancing student loans at a lower interest rate can have an indirect positive effect on your credit. For example, if refinancing lowers the amount you pay each month, you may be more likely to make payments on time. You may also pay off your loans faster, which can help you reduce your overall debt and improve your score. (Note: You may pay more interest over the life of the loan if you refinance with an extended term.)

If you refinance federal loans with a private lender — in effect, turning your federal loans into a private loan — rest assured that credit bureaus don’t view these two types of loans any differently. However, when you refinance your federal loans, you will lose certain federal protections, such as income-driven repayment plans, deferment or forbearance, and loan forgiveness programs.

Do I Need a Good Credit Score to Take Out a Student Loan?

Your credit score may be a factor when you’re applying for a student loan. It all depends on the type of loan you’re planning to take out. Most federal loans don’t have a minimum credit requirement, which is why nearly every borrower gets the same interest rate regardless of their financial profile. However, federal PLUS loans for parents require that borrowers do not have an adverse credit history.

Credit scores are typically more of a factor with private student loans. Lenders often consider your score when determining student loan approval and interest rate. In general, the better your score, the better your rate will be.


💡 Quick Tip: Refinancing could be a great choice for working graduates who have higher-interest graduate PLUS loans, Direct Unsubsidized Loans, and/or private loans.

Which Credit Scores Do Private Lenders Use?

When considering your student loan application, most private lenders look at your FICO® score. This score, which ranges from 300 to 850, helps lenders determine whether to extend credit and at what interest rate.

Because FICO is used widely throughout the lending industry, including by mortgage lenders and credit card providers, it gives lenders an apples-to-apples comparison of potential borrowers.

The Takeaway

Student loans can help borrowers establish a solid credit history, which can ease the way for future borrowing opportunities and attractive interest rates. The key is to pay what you owe on time, every time.

Paying a loan off early or shopping around for rates could cause a small, temporary dip in credit scores. Being late with a payment — or stopping payment altogether — may lower your credit score and hurt your ability to qualify for another loan.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

FAQ

Do student loans help build credit?

Student loans are an opportunity for borrowers to build credit and establish a solid credit history, which can help when it’s time to get a mortgage or take out a car loan. The key is to make regular, on-time payments.

How can I improve my credit score if I have student loans?

Payment history is one factor of your overall credit score, so making regular, on-time payments on your student loans can help you build credit.

How is my credit score determined?

Your credit score is calculated using five different categories of data. These include payment history, amounts owed, length of credit history, new credit, and credit mix.

About the author

Ashley Kilroy

Ashley Kilroy is a seasoned personal finance writer with 15 years of experience simplifying complex concepts for individuals seeking financial security. Her expertise has shined through in well-known publications like Rolling Stone, Forbes, SmartAsset, and Money Talks News. Read full bio.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.