Eager to pursue higher education but worried that bad credit might hold you back? Rest assured, having bad credit—typically defined as a FICO® Score of 579 or less—doesn’t automatically disqualify you from getting a student loan. In fact, there are options available to help you finance your education, even with less-than-perfect credit.

How to Get a Student Loan With Bad Credit

When exploring how to get a student loan with bad credit, federal student loans should be your first consideration. These loans are designed with accessibility in mind, making them an excellent choice for students with low credit scores. However, if you’ve exhausted your federal loan options or are ineligible, private student loans might be a viable alternative.

Apply for Federal Student Loans for Bad Credit

Federal student loans are often the best option for students with bad credit because most of these loans don’t require a credit check or a cosigner. Even if you’re a graduate student or a parent applying for a direct PLUS loan—which does require a credit check—the criteria are more lenient. The check primarily screens for significant negative marks on your credit report, such as bankruptcy, foreclosure, or defaulted loans.

Federal loans also offer standardized interest rates, meaning all borrowers get the same rate, regardless of creditworthiness. To apply for federal student loans, you’ll need to complete the Free Application for Federal Student Aid (FAFSA). Depending on your financial situation, you may qualify for subsidized or unsubsidized loans.

Pros and Cons of Federal Student Loans

Pros:

• No minimum credit score and, in most cases, no credit check.
• Standardized interest rates.
• Several relief options during repayment.

Cons:

• Low annual loan limits for undergraduate students.
• No choice of loan servicer.
• Upfront loan fees.

Apply for Private Student Loans for Bad Credit

Private student loans are another option when considering how to get a student loan with bad credit. However, these loans typically require a credit check. If your credit score is low, you may need a cosigner—such as a parent—to increase your chances of approval. A cosigner’s good credit can not only help you secure the loan but also result in more favorable terms.

Some private lenders may offer loans without a cosigner, using your degree program and prospective career as factors in determining your creditworthiness. However, these options can be more costly. Take the time to shop around and compare offers from multiple lenders to find the best fit for your needs.

Pros and Cons of Private Student Loans

Pros:

• No upfront loan fees.
• Larger annual loan limits.
• Choice of lender.

Cons:

• Strict eligibility requirements.
• Higher interest rates compared to federal loans.
• Fewer relief options during repayment.

How to Improve Your Credit Before Applying for Student Loans

If you’re set on getting a private student loan, improving your credit score can help you qualify for lower interest rates, saving you money in the long run. Here’s how to boost your credit before applying:

• Pay on time: Always pay your bills on time. If you’re behind, catch up quickly to minimize further damage to your credit score.
• Lower your balances: Pay down credit card debt as much as possible. Reducing your credit utilization rate can increase your credit score.
• Open a credit card: Responsible use of a credit card can demonstrate good financial management. If you have bad credit, consider a secured credit card and pay off the balance monthly.
• Become an authorized user: Ask a trusted family member to add you as an authorized user on their credit card. Their responsible management of the account can help boost your credit.
• Use Experian Boost®ø: This free service adds on-time payments for utilities, rent, and streaming services to your Experian credit file, potentially raising your credit score.

How to Get Financial Aid for College

Federal student loans are just one form of financial aid. You can also explore scholarships, grants, and work-study programs, which don’t require repayment. Here’s how to maximize your financial aid opportunities:

• Fill out the FAFSA: This application, offered by the Department of Education, is essential for federal financial aid.
• Complete the CSS Profile: This online application, provided by College Board, can give you access to non-federal institutional aid.
• Search for scholarships: Use scholarship search engines like Scholarships.com, Fastweb, and Scholly to find private scholarships and grants.

Alternatives to Student Loans for Bad Credit

If student loans aren’t the right fit for you, consider these alternatives to pay for college:

• Scholarships: Research and apply for nonprofit or private scholarships.
• Grants: These don’t need to be repaid and are often based on financial need.
• Work-study: A federal program that allows you to earn money by working part-time on campus.
• Part-time jobs or internships: Earning income while in school can help reduce your reliance on loans.

Focus on the Long Game With Your Credit

Your current credit score might limit your options, but adopting good credit habits can improve your financial situation over time. With Experian’s free credit monitoring service, you can track your FICO® Score and credit report, identify areas for improvement, and monitor your progress.

In the end, the answer to “Can You Get a Student Loan With Bad Credit?” is yes. Whether through federal or private loans, or by improving your credit before applying, you have options to finance your education and achieve your academic goals.

If you ever need expert assistance or guidance on your credit journey, don’t hesitate to reach out to the Nerds! Additionally, stay updated with the latest tips and information by following us on Facebook, Instagram and TikTok!