Smart Strategies on Rebuilding Credit After Student Loan Default Thursday 02 April, 2020
Thank you Lexington Law Firm for sponsoring this post. A high service partner and consumer advocate that will help you fight for the credit you deserve!
Welcome to adulting, where sometimes you have to worry about your credit and debt that you owe. One of the biggest debts that I owe is on my student loan debt. Yes I am one of the millions of Americans who chased the college dream, and I literally have to pay for it. As someone who has obtained their degree, I will admit, I didn’t get financially schooled on how to manage my credit after graduation.
I will be honest, I am nowhere near finished paying on the loan, and it has affected my credit score. Every year millions of Americans are denied loans for homes and cars due to errors on their credit reports. On average, these errors can take months to correct. It’s never too late to learn and repair the damage, especially if you took a hit getting student loans like I did.If you have some student loan debt like myself, here are some tips and smart strategies on rebuilding your credit.
Contact Your Loan Collection Agency
This is the most important step and often the hardest one to get a move on. Inquire if you are eligible for a lower payment or another option. Your loan servicer will also determine your monthly payment amounts. Depending on your financial situation, you can work with your loan holder to try and get the payment amount decreased.
Figure Out How Much You Can Afford To Pay Monthly On Your Student Loans
Map out how much realistically you can afford to pay each month on your student loans. Be sure to take into consideration your housing expenses, car payments and any other set monthly payments you are responsible for and factor in a minimum to pay for your student loans based on your wages.
Decide Between Payment Options
These are a couple of options to choose for getting out of student loan default. Deciding which one to use is the first step to getting out of default. These steps are:
Paying off the student loan balance in full
Student loan consolidation
Student loan rehabilitation
The fastest way is to pay off your student loans in full. For many, this is usually not the most practical option. The next two options are loan rehabilitation and loan consolidation. Loan consolidation doesn’t remove the default from your credit report and there can be limitations on repayment plans.
Start Repairing Your Credit
Now this is one of the most important steps. After you figured out how you will be repaying the loans and configuring your repayment plan, it’s time to start repairing and improving your credit. Great news is you can get a complimentary credit report consultation with Lexington Law Firm to see how they can help you repair your credit. I’ve researched them and trust them because Lexington Law Firm is the most respected name in credit repair.
They have long-standing relationships with all three of the credit bureaus: Equifax, Experian, and TransUnion. These relationships, and a deep expertise in knowing how getting errors removed works, enable the team to communicate more routinely and efficiently for their clients. Lexington Law Firm is also a CROA (Consumer Credit Protection Act) compliant organization. This means it is regulated extensively with auditors and regulators. Just as you might hire a CPA or MD to manage your taxes or health, you should demand nothing less from your credit repair partner.
Speak to a consultant with Lexington Law and find out your own credit score and ways to repair it effectively here.
Budget your Finances
After figuring out your student loan repayment plan and starting the process of repairing your credit, you have to start budgeting. This is the time more than ever to make smarter financial decisions by monitoring your budget. Make a weekly, monthly and even a yearly projected budget. Always monitor your spending habits. Have a savings account and actively put money away monthly to have a financial cushion. Keep an active look at your bank account transactions and have alert notifications on your smart devices for easier tracking.
Defaulting on your student loans can feel like you are failing and defeated. It can be discouraging because student loans are such a large lump sum that takes a toll on your credit. Trust me, this has bothered me for years and it is time to find better solutions to getting this resolved. It is not always easy, but actively seeking reliable resources to break down your current credit score and talking to professionals can help ease you to the next steps on healing your credit score.
I highly recommend consulting with Lexington Law Firm and get the help to start the process of rebuilding your credit the right way. It doesn’t have to be as stressful and frustrating, you just have to know who to talk to and who will give you the best results and rebuild your score effectively.
Get your free credit report consultation with Lexington Law here.
Do you have any credit concerns you want to repair?
About the Blogger - Kiwi the Beauty
Kiwi is the free spirited blogger and content creator of KiwiTheBeauty.com. As a digital influencer, she produces creative inspiration around beauty, lifestyle, media and travel leisure. Her life mantra is to make manifesting fun! When she’s not blogging, she is eating trendy hipster food, carrying crystals, making it rain at her local farmer's market and binge brunching.
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This is going to help a lot of people. Student loans have been the death of so many people’s credit. You never think about how hard they’ll be to pay back. You always think you’ll get an amazing job that will leave you able to easily make the payments.
Holding our own credit card requires a discipline on our part. We should always have plans on how to pay it at the right time or else, we will be forever in debt with these companies offering credit cards.
i cannot imagine defaulting on a school loan. that must be one of the worst feelings. i hope you can help those who are having troubles with their finances with this post.
Very good and useful post. I have heard students suffering from not being able to pay back the loan. I will definitely share it with my family circle and friends.
great information. i’m going to try and get my student loans forgiven due to disability. i’m also worried about my credit after this but it is what it is.
Student loans are very painful! It’s really freedom once they are all over. <3 thank you for giving us these strategies. very helpful especially for us students.
Thanks for the practical tips and sharing. I am far beyond the days of needing a student loan but glad to get to know the struggles of students today, too! – Knycx Journeying
My credit card messed up because I was victim of phising. I was not able to perform any bank loan since then. It is important to keep our finances at bay. Thank you discussing this.
I never get student loan before not because we can afford going to school, but I decided to go to a cheaper one that provides similar accreditation.
You’ve shared valuable tips here that could be applied to other kinds of loan
This is a great idea and it would help for some students. During my school days I was a working student and I have loans too but just a little bit for my projects and other miscellaneous.
This is so helpful especially with everything going on right now in the world. I will pass this along to all my friends who have student debit and are unsure how to get out of it.
This is a nice way and I like to look for more options because I’m sure there will be an option that suitable for me. Thank you for sharing this informaive post!
This is fantastic information! I just finished paying off my student loans not to long ago and we’ve started working to rebuild our credit. It’s no easy task though… that’s for sure.
These are such great tips to keep in mind. I’m trying rebuild my credit and pay off my debt. I hope to be debt free by the end of the year. Hoping this quarantine ends so i can get back to work and make this happen!
Thanks for the tips as I am someone who is trying to build a life after student loans. My only problem is that I live in another country which doesn’t care about my US credit. I want to keep up my US credit clean as I might move back.
We are slowly working on this, rebuilding your credit is a long and hard process. Yeah, you can pay off your debts, but you really need to work on your habits and what got you there in the first place. If you don’t you might just end up back in debt again. Thank you for sharing!
Like you, I have student loan debt that I will be dealing with for a long time. Loan consolidation is a good method for repairing ones credit while we wait for the education system in America to catch up with reality.
This is going to help a lot of people. Student loans have been the death of so many people’s credit. You never think about how hard they’ll be to pay back. You always think you’ll get an amazing job that will leave you able to easily make the payments.
Holding our own credit card requires a discipline on our part. We should always have plans on how to pay it at the right time or else, we will be forever in debt with these companies offering credit cards.
Excellent advice. We need to be very careful with our credit. It is a matter of discipline and hard work but is not imposible
i cannot imagine defaulting on a school loan. that must be one of the worst feelings. i hope you can help those who are having troubles with their finances with this post.
Very good and useful post. I have heard students suffering from not being able to pay back the loan. I will definitely share it with my family circle and friends.
Education in the US is very expensive and I understand that student loans are necessary. I think it needs budgeting and proper allocation of funds.
Posts like this make me so happy that the uk system is different, I imagine it’s is very useful for anyone going though the us higher education system
great information. i’m going to try and get my student loans forgiven due to disability. i’m also worried about my credit after this but it is what it is.
Student loans are very painful! It’s really freedom once they are all over. <3 thank you for giving us these strategies. very helpful especially for us students.
Every loan is painful but student loan is more panic, your article is very much informative and guidelines for defaulter.
Thanks for the practical tips and sharing. I am far beyond the days of needing a student loan but glad to get to know the struggles of students today, too! – Knycx Journeying
I am so lucky I don’t have any student loans but a friend of mine has USD19,000 in student loans…Great tips, I will flip your post to her. Thank you.
Taking care of your credit is important. Having bad credit can make one’s life hell
My credit card messed up because I was victim of phising. I was not able to perform any bank loan since then. It is important to keep our finances at bay. Thank you discussing this.
Such an amazing advice regarding loan. You definitely know about this and cited it informatively.
Get out of the loan default first. But, this is a good idea.
Great post with the action steps to consider for those who are in this situation.
I never get student loan before not because we can afford going to school, but I decided to go to a cheaper one that provides similar accreditation.
You’ve shared valuable tips here that could be applied to other kinds of loan
This is a great idea and it would help for some students. During my school days I was a working student and I have loans too but just a little bit for my projects and other miscellaneous.
Student loan is necessary now a day as we know studies are expensive these days. One should very careful about their loans. Thanks for the advice
This is so helpful especially with everything going on right now in the world. I will pass this along to all my friends who have student debit and are unsure how to get out of it.
Wow these are some great and useful tips.
This is a nice way and I like to look for more options because I’m sure there will be an option that suitable for me. Thank you for sharing this informaive post!
Ugh – the never ending student loan debt!! I’ve been working on my credit as you suggest. But I really wish I could pay it in full!
you gave off some very helpful tips.thanks for this
Great tips! Definitely helpful for millinieals because boy are some of us going through it!
This is a great post! Rebuilding credit is something a lot of people struggle with.
This is fantastic information! I just finished paying off my student loans not to long ago and we’ve started working to rebuild our credit. It’s no easy task though… that’s for sure.
This is good information and I can attest that these strategies work.
Very interesting, thank you. You really ‘know your stuff!’
These are such great tips to keep in mind. I’m trying rebuild my credit and pay off my debt. I hope to be debt free by the end of the year. Hoping this quarantine ends so i can get back to work and make this happen!
Wow,these are great tips to rebuild your credit after having a bad student loan.
Thanks for the tips as I am someone who is trying to build a life after student loans. My only problem is that I live in another country which doesn’t care about my US credit. I want to keep up my US credit clean as I might move back.
We are slowly working on this, rebuilding your credit is a long and hard process. Yeah, you can pay off your debts, but you really need to work on your habits and what got you there in the first place. If you don’t you might just end up back in debt again. Thank you for sharing!
I’ve heard how difficult it is to have student loans and going in default can sometimes be inevitable. Good thing for you to give out these tips.
Great tips! This should Def be taught to college and high school students as well.
This is good advice. I did a few of these when I had to take care of my student debt.
Like you, I have student loan debt that I will be dealing with for a long time. Loan consolidation is a good method for repairing ones credit while we wait for the education system in America to catch up with reality.
This is a great trick and strategy. Informative indeed!