FINANCIAL AID PUBLICATIONS

STUDENT FINANCIAL AID HANDBOOK

2008– 2009

Chapter Ten

YOU AND YOUR CREDIT

Eligibility for Graduate Plus and private loan programs that are utilized by students is based upon credit worthiness. A credit score is used to initially determine the general status of an applicant’s credit history and used in conjunction with the review of the credit report.
As such, the following list represents a GENERAL example of credit criteria that have been used by the majority of private lending programs to establish one’s eligibility for a private loan. We strongly recommend to each prospective borrower that you contact the appropriate national credit bureau for your area of the country and request a copy of a current credit report before applying for financial aid. Erroneous data or “bad” credit issues can be addressed immediately and will likely prevent delays in loan approval.

CREDIT CRITERIA
Lenders review credit activity when determining credit status and/or credit worthiness. It is generally necessary to have a relatively long period of non-derogatory credit history in order to be approved.

• You should have no or a very limited number of accounts showing a 30, 60 or 90-day delinquency status.
• You should have no record of a collection or charged-off account.
• You should have no record of foreclosure, repossession, open judgment or suit, unpaid prior education loan default or other negative public credit record items.
• You should have no record of a bankruptcy.
• There should be a limited number of inquiries to an authorized credit reporting agency.

Financial transactions of any sort are reported on the credit report, such as prior student loans, personal consumer loans, credit cards, tax liens, and debts to private corporations. Adverse credit information can be reported for up to seven years.

The absence of any credit history IS NOT viewed as bad credit. You cannot be denied an educational loan because you have no credit history. However, if you had adverse credit within the past seven years, such as having filed for bankruptcy, a tax lien, or defaulted student loan, or any other unresolved credit problem that can be sent to a collection agency, the alternative loan application can be denied.

You are entitled to receive one free credit file disclosure every 12 months from each of the nationwide consumer credit reporting companies – Equifax, Experian and TransUnion. This free credit file can be requested through www.annualcreditreport.com, by phone or by mail.

You can request your credit report by mail by filling out the request form and mailing it to:

Annual Credit Report Request Service
P.O. Box 105283
Atlanta, GA 30348-5283

You must have an Adobe viewer to download the request form. Download the free Adobe viewer.
Call 1-877-322-8228 to request your credit reports by phone. You will go through a simple verification process over the phone. Your reports will be mailed to you.