As the "student loan on-ramp" period comes to a close on September 30, borrowers with federal student loans need to prepare for the resumption of credit reporting on missed or incomplete payments. Over the past year, approximately 6.7 million borrowers have enjoyed a reprieve from negative credit impacts due to missed payments, but this grace period is ending. Starting October 1, any missed payments will be reported to credit agencies, potentially causing significant drops in credit scores—some borrowers could see declines of over 100 points, particularly those with strong credit histories. This could also lead to increased interest rates on credit cards, as lower credit scores give lenders the opportunity to raise rates. Borrowers are encouraged to explore income-based repayment options and other assistance programs to manage their payments effectively. With the deadline approaching, it is crucial for borrowers to budget and communicate with their loan servicers to avoid negative consequences.
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