Does Credit Rating Affect My Federal Stafford Loan Application?

While most loans you apply for have strict credit rating requirements, your Federal Stafford loan application decision is not based on credit worthiness. Stafford loans are given based on financial need, and are subsidized by the U.S. government. To apply for a Stafford loan, you must first complete the Free Application for Federal Student Aid (FAFSA). This application must be completed no later than the spring, although because you may have to participate in a verification process to determine your income and resources, the sooner you complete the application the better.

While your Stafford loan does not determine your loan eligibility by your credit rating, if you are unable to repay your loan or default on your loan and do not work with your lender, your repayment status can actually affect your credit rating. Student loans can also affect your ability to obtain other credit, such as mortgage or auto loans, if your loan payments reduce your available income by a significant amount.

If you do have difficulty repaying your loans, contact your lender immediately and talk to them about deferment and forbearance options that will keep your inability to pay from reflecting negatively on your credit rating.


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