I have mentioned this before in the past but would like to post again just incase soemone has missed the information. Here is what I have found out from lenders from a research product & they include American Express, Chase, Wells Fargo, & some credit unions. Even though the federal government has directed student loan issuers to report borrowers of these types of loans due to the pandemic, we will still go off of the payment history. As part of the original loan term, that all monthly payments will be made on time. On new credit applications, if we see several months of missing payments, then how can we trust that the consumer that is applying for new credit, still be able to make those payments on time. The only exception is, is a large payment was made so that the individual did not have to worry about making payments. For example, if you have a $ 400 vehicle payments and made one $ 4,000 payments, then no payment would be needed for 10 months. The FICO score is not the only determining factor. Consistent payment history each month is a huge factor. I had one lender tell me that you can be in the upper 700's or even into the 800's score range and still get denied. Bottom line, this the lender's requirement on new credit. There maybe some that overlook that, but keep in mind that your debt to income ratio increases as these student loans have restarted. There is one more thing that a lender had told me. For parents, especially grand parents, that are considering being a cosigner on a student loan, think long & hard before doing so. If something goes wrong, then you are on the hook for the payments. The consequences could be the affect of your retirement. financial well being, & the government withholding your social security monthly benefits if loan payments are not made.
