So you checked your credit score and saw it’s around 600, but you want to take out a student loan to pay for college.
Hence, you’re worried your score is too low to qualify. What can you do in this situation?
Don’t panic! You can take steps to improve your credit and get approved for student loans.
Keep reading for tips to raise your credit score from 600 when you want to get a student loan.
Read Also: Student Loan Refinance Rates
Understanding What Student Loan 600 Credit Score Means
A credit score of 600 is considered fair by most lenders. It’s below the range for good credit (670-739) but above bad credit (300-579).
This means you can likely still qualify for student loans, but you may not get the best terms or interest rates.
Lenders view borrowers with scores around 600 as higher risk. You have established some credit but may also have some issues with missed or late payments.
Credit scoring models calculate your score based on the information in your credit reports. Factors that could be hurting your score include:
- High credit utilization ratio – Using over 30% of your available credit limits
- Late payments – Paying bills past the due date
- Collections accounts – Unpaid debts sent to collection agencies
- Bankruptcies or foreclosures – Previous defaults on major debts
- Limited credit history – Not having enough accounts or history
The good news is there are steps you can take right away to start improving your credit score.
With some time and effort, you can likely boost your score enough to qualify for student loans with better terms.
Tips for Raising Your Credit Score
Improving your credit takes persistence, but you can see results if you follow healthy habits.
Here are some effective ways to boost your credit score to over 600:
1. Pay Bills On Time
Payment history makes up a significant portion of your credit score. Set up autopay through your bank or credit card provider to ensure you never miss a payment due date.
Setting payment reminders in your calendar can also help. Limit late payments as much as possible.
2. Lower Your Credit Utilization Ratio
Keep balances low on credit cards and other revolving credit. You should aim for less than 30% of the card limit.
Pay off cards in full each month if you can. Also, consider contacting issuers to request higher credit limits. This lets you use more of the limit before hitting that 30% utilization level.
3. Avoid Applying for New Credit
Each application for credit results in a hard inquiry on your credit report. Too many hard inquiries in a short timeframe can lower your credit score temporarily.
Try not to open many new accounts at once while rebuilding credit. Let your score improve over 6-12 months before taking on new credit.
4. Pay Down Debt
Carrying high balances on loans and credit cards will hurt your credit utilization ratio.
Create a budget to allocate extra monthly money to pay down account balances. You’ll lower utilization and demonstrate responsible payment habits over time.
5. Dispute Any Credit Report Errors
Incorrect or outdated information on your credit reports could be dragging down your score.
Review your reports carefully at AnnualCreditReport.com. If you find errors, submit dispute letters to the credit bureaus requesting investigation and removal. This can boost your score once resolved.
6. Add Positive Information
One of the best ways to build robust credit histories is to hold installment loans (like student loans, car loans, or mortgages) and credit cards over the long term with positive payment activity.
Having various account types shows lenders you can expertly manage different credit commitments.
With diligence and patience, you can improve your credit score significantly in less than a year.
Monitor your progress periodically by checking your score and credit reports. As your score climbs past 600, you’ll start to qualify for better loan terms and products again.
Read Also: 5 Best Student Loans For 2023
Ways to Get Student Loans With a 600 Credit Score
Don’t let a 600 credit score deter you from pursuing higher education. There are options to get approved for student aid, even if you don’t have excellent credit.
Here are some ways to secure student loans when your score is around 600:
1. Apply With a Cosigner
Adding a cosigner with a good credit history to a loan application can help compensate for your lower score.
The cosigner agrees to take equal financial responsibility for the loan. Their positive payment activity and income can help you qualify and secure better interest rates.
Parents, guardians, and even close family friends may cosign student loans with you.
2. Look Into Federal Student Loans
Federal student loans, like Direct Loans, don’t require credit checks or cosigners. You complete the Free Application for Federal Student Aid (FAFSA) each year in college.
Based on financial need, you can qualify for up to $5,500 – $12,500 in your name only via Federal Direct Subsidized and Unsubsidized Loans.
3. Research Private Student Loans
Many top student loan lenders allow cosigners, even on private loans. Ask each lender about their underwriting criteria and options before applying.
Some may approve students with credit in the high 500s or low 600s on certain products. Comparison shopping helps find your best rates.
4. Appeal With Extenuating Circumstances
If recently denied, appeal the lender’s decision and provide explanatory documents about your credit past.
Unforeseen circumstances like medical issues, military service, family emergencies, or divorce can sometimes override credit requirements during appeals. It never hurts to ask for reconsideration.
5. Improve Your Credit, Then Reapply
Building your credit score for 6-12 months before reapplying can make a difference.
Taking the steps outlined earlier in this article shows lenders you’re committed to healthier financial habits.
A boosted score gives you access to more student loan products and better interest rates.
A credit score of around 600 doesn’t preclude you from getting loans you need to earn your college degree.
Take proactive measures like adding a cosigner or appealing denials when possible. Most importantly, continue practicing wise credit management daily.
You can earn the loans you need to achieve higher education goals and set yourself up for financial success.
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