How Your Student Loan Payments Will Impact Your Credit

It has been one year since federal student loan payments resumed after a 42-month pandemic-related pause, but borrowers have been receiving one benefit: Missed payments didn’t damage their credit standing.

That’s about to change.

The Biden administration provided borrowers with a yearlong “on-ramp” to help them ease back into the repayment routine. Missed bills weren’t reported as late or delinquent, and borrowers weren’t placed in default or reported to collection agencies. This ended on Sept. 30, and October will usher in a return to business as usual.

Many borrowers may be confused. The eight million people enrolled in the repayment program known as SAVE, for example, had their payments frozen because of legal challenges from several Republican-led states — and those bills are still on hold.

Here’s what borrowers need to know.

What’s changing right now — and how can it affect my credit?

Student loan payments resumed and interest began to accrue in September 2023. If you have been making on-time payments since then, nothing meaningful changes for you now that the on-ramp has ended.

But if you’ve missed some or all of your monthly bills — and continue to — that new activity will now be reported to the big three credit reporting companies: Equifax, Experian and TransUnion.

There’s still a bit of wiggle room built into the payment process: A missed bill is reported only after 90 days of nonpayment. So if you fail to pay your October bill, you have until your due date in January to become current or take other actions (like enrolling in a more affordable repayment plan or getting a forbearance), senior Education Department officials explained. After that, you’ll be reported as delinquent.